In a world of tight legal and economic networks, tax disputes are on the increase. Mutual agreement procedures have virtually been the only means of settling such tax disputes amicably. In practice, mutual agreement procedures have not always proved satisfactory. The Convention on the Elimination of Double Taxation in connection with the adjustment of profits of associated enterprises, can serve as an alternative dispute settlement vehicle. However, only transfer pricing disputes fall within the applicability of this EU Convention and its geographic scope is restricted to EU territory. As part of their treaty policy, some countries have therefore added arbitration clauses to newly negotiated tax treaties. These arbitration clauses extend the competence of an arbitration board not only to transfer pricing disputes but to the entire scope of a tax treaty, thereby avoiding most of the disadvantages of a simple mutual agreement procedure.