The agreement between Azerbaijan and Kyrgyzstan on eliminating double taxation on income and preventing tax evasion came into force on January 1, 2025, Report informs, citing the State Tax Service under the Ministry of Economy.
This is the first agreement between the two countries on eliminating double taxation.
The agreement applies to individuals and entities who are residents of one or both states.
It covers taxes levied on total income or its individual elements, including income from the disposal of movable and immovable property, salaries and wages paid by enterprises, as well as capital gains.
Under the agreement, personal income tax and corporate profit tax in both countries are exempt from double taxation.
The agreement also extends to any taxes introduced after its signing that are essentially identical or similar to existing ones.
Additionally, income derived by residents from immovable property may be taxed in the country where the property is located. The definition of immovable property includes auxiliary property, livestock and equipment used in agriculture and forestry, rights under national legislation related to land ownership, usufruct of immovable property, and rights to variable or fixed payments for the exploitation of mineral deposits, sources, and other natural resources. However, ships, aircraft, motor vehicles, and railway transport are not considered immovable property.
The term "resident" refers to any person subject to taxation in a state based on residence, domicile, place of registration, management center, or similar criteria, as well as the state itself, its administrative-territorial units, and state or local authorities.
The agreement between Azerbaijan and Kyrgyzstan was signed on April 24, 2024, in Baku by Azerbaijan's Minister of Economy Mikayil Jabbarov and Kyrgyzstan's Minister of Economy and Commerce Daniyar Amangeldiev.
To date, Azerbaijan has signed similar agreements with 57 countries, 56 of which are currently in force.