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