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HMRC internal manual

Double Taxation Relief Manual

Double Taxation relief Manual: Guidance by country: Azerbaijan: Royalties

Royalties arising in Azerbaijan and paid to a resident of the UK who is the beneficial owner of the royalties are taxable in Azerbaijan at a rate not exceeding:

  1. 5 per cent for royalties paid in respect of any copyright of literary, artistic or scientific work (including cinematograph films, and films or tapes for radio or television broadcasting) and
  2. 10 per cent in respect of all other royalties (Article 12(2)).

Where however the royalties are effectively connected with a permanent establishment or fixed base which the UK resident recipient has in Azerbaijan, the provisions of the Business Profits Article (Article 7) or the Independent Personal Services Article (Article 14) will apply.

The above reduced rates of Azerbaijan tax only apply if the income is taxed in the UK. So, in cases where the remittance basis is claimed, relief from Azerbaijan tax will only be due in respect of the income remitted to and taxed in the UK.