DTA 01, 02, 03, 04, 05

Double taxation refers to a situation where an individual or organization is taxed by two different countries on the same income, profit, or property. This situation can create problems for international trade, investment, or individuals earning foreign income.

Azerbaijan has agreements with many countries to eliminate double taxation. These agreements regulate specific taxes and the conditions under which they are applied. In order to prevent double taxation and encourage investment, many countries enter into Double Taxation Agreements (DTAs). The main objectives of these agreements are:

• Reducing the tax burden — protecting individuals and companies from paying tax twice on the same income.

• Clarifying tax obligations — determining which taxes each country can apply.

• Preventing tax evasion — promoting transparency through the exchange of tax-related information.

There are two main methods for eliminating double taxation:

• Tax Credit — the individual or company is allowed to deduct the amount of tax paid abroad from the tax due in their home country.

• Tax Exemption — income or profit earned in a foreign country is not taxed in the individual's or company’s home country.

The “Rules for Administration of International Agreements on the Elimination of Double Taxation between the Republic of Azerbaijan and Other States” (hereinafter referred to as “the Rules”) were prepared in accordance with Clause 14 of the “Directions for Reforms in the Field of Taxation in 2016”, approved by Decree No. 2257 of the President of the Republic of Azerbaijan dated August 4, 2016, which aims to improve tax administration and implement reforms. These rules establish procedures for implementing international treaties on the elimination of double taxation concerning income and property taxes signed between Azerbaijan and any foreign state and entered into force in accordance with relevant national procedures.