Azernews.Az

By Kamila Aliyeva

The government of Azerbaijan will soon sign agreements with five more countries to eliminate double taxation, said Zaur Fatizadeh, the Director General of the Tax Ministry’s Department for International Cooperation and Tax Monitoring at Financial Institutions.

"We have already agreed upon draft agreements with Singapore, Malaysia, Slovakia, Ireland and Morocco, and they are expected to be signed soon," he told the Vergiler newspaper, adding that talks on similar agreements are underway with Albania, Bangladesh, Kyrgyzstan, Syria, India, Turkmenistan, Portugal and Oman.

The model of treaties was also submitted to 12 countries such as Argentina, Indonesia, Iraq, the Philippines, Colombia, Lebanon, Egypt, Peru, Thailand, Tunisia, Uruguay and Andorra, according to Fatizadeh.

Double taxation occurs when two different countries subject the same item of income or property to tax for the same period and in the hands of the same taxpayer. In other words, the same income is being taxed twice – the country of source where the income arises and the country of residence where the income is received.

The agreement on eliminating double taxation is a bilateral agreement between two countries to avoid double taxation, which may arise as a result of the application of respective domestic tax laws.

To date, Azerbaijan has signed the double tax agreements with 53 countries. Of the signed agreements, 48 have already entered into the force.

Fatizadeh further added that the agreements with five more countries - Jordan, Spain, Malta, Israel and Denmark - are awaiting ratification.

“The agreements with Jordan, Spain and Malta have already been ratified by the Milli Majlis (Parliament) of Azerbaijan and are awaiting ratification of the other side. In addition, the agreements with Israel and Denmark will enter into force after ratification by the parliaments of both countries,” he said.

The main objective of the double tax agreements is to provide certainty regarding when and how tax is to be imposed in the country where the income-producing activity is conducted or payment is made. As a result is defines the jurisdictional authority on cross-border transactions.

The deal also seeks to prevent international tax evasion by sanctioning the exchange of information between the tax authorities of the contracting countries.

---

Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

Follow us on Twitter @AzerNewsAz