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HMRC internal manual

Double Taxation Relief Manual

Double Taxation relief Manual: Guidance by country: Azerbaijan: Treaty summary

Page 3: Treaty summary

The table summarises the provisions of the treaty in force. Where a percentage rate is shown, this rate is the ‘treaty rate’ and does not reflect taxes chargeable under the domestic law of either state before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which the UK and Azerbaijan are permitted to tax income in the relevant categories under the treaty. Rates chargeable under the domestic law of either state may be higher or lower.

In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details.

Portfolio dividends 15% (note 1) Article 10
     
Dividends on direct investments 10% (note 1) Article 10
Conditions for lower rate on dividends on direct investments The beneficial owner must  be a company which controls, directly or indirectly, at least 30 per cent of the voting power in the paying company or a company which has invested at least 100,000 US dollars (or the equivalent amount in the currency of either Contracting State) in the share capital of the  paying company at the date the dividend is paid Article 10
Property income dividends 15% (note 1) Article 10
Interest 10% (note 2) Article 11
Royalties 10% (note 3) Article 12
Government pensions Taxable only in the Azerbaijan, unless the individual is a resident and a national of the UK Article 18
Other pensions/annuities Taxable only in the UK (note 1) Article 19
Arbitration No Article 26

Note 1: The beneficial owner must be subject to tax in the UK

Note 2: Interest is taxable only in the state of residence of the beneficial owner where such interest is paid:

  • and beneficially owned by the UK Government or any agency or instrumentality thereof.
  • in respect of a loan made, guaranteed or insured, or any other debt-claim or credit guaranteed or insured, by the United Kingdom Export Credits Guarantee Department.

Note 3: A lower rate of 5% applies to the gross amount of royalties paid in respect of any copyright of literary or artistic work (including cinematograph films, and films or tapes for radio or television broadcasting)