The main purpose of this research paper is to find out that the effect of double taxation treaties on tax relief and foreign firms' investment flows (FDI): Evidence from Pakistan what matters most for relief double taxation of a country. We have tried our level best to complete the research paper with respect to the desired requirements. This study analyzed the benefits of Double Taxation Treaties to firm in terms of profits from dividend and capital gains, and whether or not these benefits lead to increase in foreign investment Inflows.