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8.2.2. Withholding Taxes

Dividend

Dividends paid by resident enterprises are subject to withholding tax at the rate of 10% unless the rate is reduced or modified under a tax treaty.

Interest

Interest paid by residents, permanent establishments of non-residents, or on behalf of such permanent establishments (except for interest paid to resident banks or branches of non-resident banks) is subject to withholding tax at 10% unless the rate is reduced or modified under a tax treaty.

Royalty Copyright

Royalty payment is subject to withholding tax at the rate of 14% on royalties paid to non-residents unless the rate is reduced or modified under a tax treaty.

Royalty Patent

Royalty payment is subject to withholding tax at the rate of 14% on royalties paid to non-residents unless the rate is reduced or modified under a tax treaty.

Royalty Trademark

Royalty payment is subject to withholding tax at the rate of 14% on royalties paid to non-residents, unless the rate is reduced or modified under a tax treaty.

Service Management

Tax is withheld at the rate of 10% on service management fees paid to non-residents legal entities unless the rate is reduced or modified under a tax treaty.

Service Technical

Tax is withheld at the rate of 10% on service technical fees paid to non-residents legal entities unless the rate is reduced or modified under a tax treaty.

International Transportation and Telecommunication Services

Income from International Transportation and Telecommunication Services is subject to withholding tax at the rate of 6% unless the rate is reduced or modified under a tax treaty.

Insurance Payments

Risk insurance or reinsurance payments are subject to withholding tax at the rate of 4% unless the rate is reduced or modified under a tax treaty.

Rental Fees for Movable and Immovable Property

Rental fees for the movable and immovable property are subject to withholding tax at the rate of 14% unless the rate is reduced or modified under a tax treaty.

Other

Any other Azerbaijan-sourced income is subject to withholding tax at 10%.

Direct or indirect payments to a person in a country with a preferential tax regime are considered income from an Azerbaijani source and subject to 10% withholding tax. Effective 1 January 2019, payments made to branches and representative offices of companies registered in preferential tax jurisdictions and any bank transfers to companies in preferential tax jurisdictions, are deemed as Azerbaijan-sourced income and subject to withholding tax at the rate of 10%. (see Sec. 13.5. for a list of jurisdictions so classified)

Below is a discussion of domestic withholding tax rules for most of the common cross border payments.

Capital Gains
20%
Dividends
10%
Interest
10%
Royalty Copyright
14%
Royalty Patent
14%
Royalty Trademark
14%
Sales
0%
Service Management
10%
Service Technical
10%

* Rates are current as of 29 January 2023