The Serbian club had been banned for three seasons because of the issue.
European football's governing body Uefa said Partizan had broken rules on unpaid debts three times in the past five years.
However a Court of Arbitration for Sport statement said Partizan had provided "new evidence" to show it had paid its tax bills.
The statement added: "On this basis, the parties have agreed the exclusion imposed by (Uefa) shall be deemed to have been made conditional on the club's timely payment of the other overdue payables identified as at September 30, 2016.
"Taking into account the fact that FK Partizan has satisfied this condition, the club will be eligible to compete in future Uefa club competitions."

At this week's European Council, David Cameron will call for "greater co-operation" and a halt to the traffic in "guns from the western Balkans".
Mr Cameron will also propose a "new EU-wide ban on all high-powered semi-automatic weapons".
The EU's response to the Paris attacks will be discussed at the meeting, which begins on Thursday in Brussels.
Number 10 said that alongside a ban, measures would include greater sharing of ballistics data, a plan to improve intelligence about firearms in the western Balkans, action to take firearms out of circulation and a "clear implementation" plan for all member states.
Mr Cameron said the "horrific terrorist atrocities" in Paris showed the scale of the threat facing Europe.
"A terrorist threat in one country is a danger to all of us, so I believe there is more we must do together to tackle the terrorist threat posed by Daesh," Mr Cameron said.
"We need to ensure that terrorists do not have the weapons with which they can wreak such tragedy."
Mr Cameron will also call for greater efforts to undermine online radicalisation and the ideology of so-called Islamic State, referred to by the government as Daesh.
Nils Duquet, a researcher at the Flemish Peace Institute in Brussels, said in an article for the BBC that in several recent attacks, including in Paris, there was a connection between the guns used and Belgium.
He said an increase of heavy firearms on the illegal market in Belgium was mainly linked to smuggling from the Balkans.
Hundreds of thousands of military weapons stayed in the hands of citizens after the Balkan wars of the 1990s, he said.
A semi-automatic firearm is self-loading, firing a single round each time its trigger is pulled.
A total of 130 people died and hundreds were wounded in the 13 November Paris attacks, when gunmen and suicide bombers attacked a concert hall, a stadium, restaurants and bars almost simultaneously.
Partizan Belgrade have had their European ban lifted after providing evidence they had cleared unpaid debts.
[NEXT_CONCEPT]
The EU should crack down on the illegal gun trade, the prime minister will urge in the wake of the Paris attacks.