Fundamental difficulties in Double Taxation Treaties

Pakistan has evidenced as many as three tax laws since its independence. The respective Governments have negotiated many tax treaties during their tenure. As Tax treaties are sovereign documents signed by the sovereign states but promulgation of Income Tax Ordinance, 2001 and amendment of OECD/UN Model treaties – ambulatory approach – have risen as many doubts in the minds regarding the double taxation treaties signed with the sovereign states. This article is an endeavour to assess the basic concepts of tax treaties at the outset and interpretational problems of the tax treaties.