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Azerbaijan-Vietnam

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Tax Treaty between Azerbaijan and Vietnam has Entered into Force

According to a recent update from the Vietnamese government, the income tax treaty with Azerbaijan entered into force on 11 November 2014. The treaty, signed 19 May 2014, is the first of its kind between the two countries.

Taxes Covered

The treaty covers Azerbaijan individual income tax, corporate income tax, property tax, and land tax. It covers Vietnamese personal income tax, business income tax, agricultural land-use tax, and non-agricultural land-use tax.

Service PE

The treaty includes provisions that a permanent establishment will be deemed constituted if an enterprise furnishes services in a Contracting State through employees or other engaged personnel for the same or connected projects for a period or periods aggregating more than 6 months within any 12-month period.

A permanent establishment will also be deemed constituted when a person conducts activities in a Contracting State (including offshore activities) related to the exploration for and exploitation of natural resources located in that State.

Withholding Tax Rates

  • Dividends - 10%
  • Interest - 10%
  • Royalties - 10%
  • Fees for Technical Services (services of a technical, managerial or consultancy nature) - 10%

Capital Gains

The following capital gains derived by a resident of one Contracting State may be taxed by the other State:

  • Gains from the alienation of immovable property situated in the other State;
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State;
  • Gains from the alienation of shares of the capital stock of a company, or of an interest in a partnership, trust or estate, the property of which consist directly or indirectly principally (50%) of immovable property situated in the other Contracting State; and
  • Gains from the alienation of shares, other than those mentioned above, in a company resident in the other State

Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation.

Effective Date

The treaty applies from 1 January 2015.

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