On the ratification of the Convention between the Government of the Republic of Kazakhstan and the Government of the Republic of Azerbaijan on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income

Home / RLA / On the ratification of the Convention between the Government of the Republic of Kazakhstan and the Government of the Republic of Azerbaijan on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income

On the ratification of the Convention between the Government of the Republic of Kazakhstan and the Government of the Republic of Azerbaijan on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income

The LAW OF THE REPUBLIC OF KAZAKHSTAN dated February 24, 1997 No. 73-1 SAM.

The footnote. Title as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

To ratify the Convention between the Government of the Republic of Kazakhstan and the Government of the Republic of Azerbaijan on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Property, signed in Baku on September 16, 1996.

President of the Republic of Kazakhstan

Agreement between the Government of the Republic of Kazakhstan and Agreement between the Government of the Republic of Azerbaijan for the Avoidance of Double Taxation and the Prevention of Fiscal evasion with respect to taxes on Income

The footnote. Name as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI. The footnote. Throughout the text of the Convention, the words "administrative division" have been replaced by the words "administrative-territorial division" in the appropriate case in accordance with the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

(Official website of the Ministry of Foreign Affairs of the Republic of Kazakhstan - Entered into force on May 7, 1997)

The Government of the Republic of Kazakhstan and the Government of the Republic of Azerbaijan, guided by their desire to strengthen and develop economic, scientific, technical and cultural ties between the two States and desiring to conclude a Convention for the Avoidance of Double Taxation and the Prevention of Tax Evasion with respect to taxes on Income and on Property,

have agreed on the following:

Article I Persons to whom the Convention applies

This Convention applies to persons who are residents of one or both of the Contracting States.

Article 2 Taxes covered by the Convention

1. This Convention shall apply to taxes on income imposed by a Contracting State or its administrative-territorial subdivisions or local authorities, regardless of the method of their collection.

2. Income taxes are all taxes levied on the total amount of income or on individual elements of income, including taxes on income from the alienation of movable or immovable property, taxes levied on the total amount of salaries or salaries paid by enterprises, as well as taxes levied on income from property appreciation.

3. The existing taxes to which this Convention applies, in particular, are:

a) in the Republic of Kazakhstan:

(i) Corporate income tax;

(ii) Individual income tax

(hereinafter referred to as "Kazakhstan Taxes");

b) in the Republic of Azerbaijan:

(i) Corporate income tax;

(ii) personal income tax

(hereinafter referred to as "Azerbaijani Taxes").

4. This Convention shall also apply to any identical or substantially similar taxes that are imposed in addition to, or in place of, the existing taxes after the date of signature of this Convention. The competent authorities of the Contracting States will notify each other of any significant changes that will be introduced into their respective tax laws.

The footnote. Article 2 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 3 General definitions

1. For the purposes of this Convention, unless the context otherwise requires:

a) terms:

(i) the term "Kazakhstan" means the Republic of Kazakhstan and, when used geographically, the term "Kazakhstan" means the State territory of the Republic of Kazakhstan and the zones in which Kazakhstan exercises its sovereign rights and jurisdiction in accordance with its legislation and international law;

(ii) the term "Azerbaijan" means the territory of the Republic of Azerbaijan, including the internal waters of the Republic of Azerbaijan, the sector of the Caspian Sea (lake) belonging to the Republic of Azerbaijan, the airspace over the Republic of Azerbaijan, as well as any other territory designated or to be designated in the future in accordance with international law and the national legislation of the Republic of Azerbaijan as a territory within which the Republic of Azerbaijan exercises its sovereign rights and jurisdiction over the subsoil, seabed and natural resources;

(b) The term "person" includes an individual, a legal entity, a company, and any other body of persons;

(c) The term "company" means any corporate entity or any economic unit that is treated as a corporate entity for tax purposes;

(d) The terms "Contracting State" and "other Contracting State" mean, depending on the context, Kazakhstan or Azerbaijan.;

(e) The terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise which is a resident of one Contracting State and an enterprise which is a resident of the other Contracting State;

(f) The term "international carriage" means any carriage by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated exclusively between locations in the other Contracting State;

(g) The term "competent authority" means:

(i) in Kazakhstan: the Ministry of Finance or its authorized representative;

(ii) in Azerbaijan: the Ministry of Taxes and the Ministry of Finance;

(h) The term "national person" means:

(i) any natural person having the nationality of a Contracting State;

(ii) any legal person, partnership or association which has acquired its status on the basis of the applicable legislation of a Contracting State.

2. As regards the application of this Convention by a Contracting State, any term not defined therein, unless the context otherwise requires, shall have the meaning which it has under the laws of that State. Any meaning under the tax laws of that Contracting State shall prevail over the meaning given to the term under the other laws of that Contracting State.

The footnote. Article 3 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 4 Resident

1. For the purposes of this Convention, the term "resident of a Contracting State" means a person who, under the laws of that Contracting State, is liable to tax there on the basis of his domicile, permanent residence, place of incorporation, place of management or other similar criteria.

The term also includes a Contracting State, its administrative-territorial unit or local authorities.

This term, however, does not include a person who is subject to taxation in that State solely on the basis that that person receives income from sources in that State.

2. Where, in accordance with the provisions of paragraph 1 of this article, an individual is a resident of both Contracting States, his status shall be determined as follows::

a) He shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State in which he has closer personal and economic ties (center of vital interests);

(b) If the Contracting State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode.;

(c) If he has an habitual abode in both Contracting States, or if he has no habitual abode in either of them, he shall be deemed to be a resident of the Contracting State of which he is a national.;

(d) If the residence status of an individual cannot be determined in accordance with the provisions of subparagraphs (a), (b) and (c) of this paragraph, the competent authorities of the Contracting States shall resolve the matter by mutual agreement.

3. If by reason of the provisions of paragraph 1 of this article a person other than an individual is a resident of both Contracting States, he shall be deemed to be a resident of the Contracting State in which he is registered (established).

The footnote. Article 4 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 5 Permanent establishment (representative office)

1. For the purposes of this Convention, the term "permanent establishment" means a permanent place of business through which the business activities of an enterprise are carried out in whole or in part.

2. The term "permanent establishment (representative office)", in particular, includes:

a) place of management;

b) branch office;

c) the office;

d) the factory;

f) workshop;

(f) A mine, mine, oil or gas well, quarry, installation, construction or any other place of exploration (including a ship), development and extraction of natural resources, as well as services related to the supervision of these works;

3. The term "permanent establishment (representative office)" also includes:

a) a construction site or a construction, installation or assembly facility or services related to the supervision of the performance of these works, if only such a site or facility has existed for more than 6 months, or such services have been provided for more than 6 months; and

(b) The provision of services, including consulting services, by the enterprise through employees or other personnel employed by the enterprise for such purposes, but only if activities of that nature continue (for such or a related project) in a Contracting State for a period or periods exceeding 6 months within any 12-month period.

4. Regardless of the previous provisions of this article, the term "permanent establishment (representative office)" does not include:

a) the use of facilities solely for the purpose of storing, displaying or delivering goods or merchandise belonging to the enterprise;

B) the maintenance of stocks of goods and merchandise belonging to that enterprise solely for the purposes of storage, display or delivery;

(c) The maintenance of a stock of goods or merchandise belonging to an enterprise solely for the purposes of processing by another enterprise;

d) the maintenance of a permanent place of business solely for the purpose of purchasing goods or merchandise, or for collecting information for the enterprise;

f) the maintenance of a permanent place of business solely for the purpose of carrying out any other preparatory or auxiliary activities for the enterprise;

(f) The maintenance of a permanent place of business solely for the purpose of carrying out any combination of the activities listed in subparagraphs (a) to (e) inclusive, provided that the combined activities of the permanent place of business resulting from such combination are of a preparatory or auxiliary nature.

5. Notwithstanding the provisions of paragraphs 1 and 2 of this article, if a person other than an agent with an independent status referred to in paragraph 6 of this Article carries out activities in one Contracting State on behalf of an enterprise of the other Contracting State and has, and habitually uses, the authority to conclude contracts in the first Contracting State, or maintains stocks of goods and products belonging to the enterprise, from which the regular supply of these goods and products is carried out on behalf of the enterprise, it is considered, that this enterprise has a permanent establishment (representative office) in the first Contracting State in respect of any activity that this person carries out for the enterprise, except in cases where the activity of such person is limited to the activities referred to in paragraph 4 of this article.

6. An enterprise is not considered to have a permanent establishment (representative office) in another Contracting State solely because it carries on business in that Contracting State through a broker, commissionaire or any other agent with an independent status, provided that these persons act within the framework of their normal activities. However, when the activities of such an agent are carried out entirely or almost entirely on behalf of such an enterprise, and conditions are created between such an enterprise and the agent in their commercial and financial relations that differ from those that could be established between independent enterprises, he is not considered an agent with an independent status in accordance with this paragraph.

7. The fact that a company that is a resident of a Contracting State controls or is controlled by a company that is a resident of the other Contracting State, or that carries on business in that other Contracting State (either through a permanent establishment (representative office) or otherwise), does not in itself transform one of these companies into a permanent establishment (representative office) the other one.

8. Notwithstanding the preceding provisions of this article, an insurance organization of one Contracting State, excluding reinsurance, forms a permanent establishment in the other Contracting State if it collects contributions in the territory of the other Contracting State or insures risks arising there through a person other than an agent with an independent status to whom the provisions of paragraph 6 apply. this article.

The footnote. Article 5 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 6 Income from immovable property

1. Income earned by a resident of one Contracting State from immovable property (including income from agriculture or forestry) located in the other Contracting State may be taxed in that other State.

2. The term "immovable property" has the meaning that it has under the laws of the Contracting State in which the property in question is located. The term in any case includes property ancillary to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of common law in relation to land ownership apply, the usufruct of immovable property, and rights to variable or fixed payments as compensation for the development or right to exploit mineral resources. sources and other natural resources; ships and aircraft are not considered as immovable property.

3. The provisions of paragraph 1 of this article shall apply to income derived from the direct use, rental or use of immovable property in any other form.

4. The provisions of paragraphs 1 and 3 of this article shall also apply to income from immovable property of enterprises and to income from immovable property used for the provision of independent personal services.

Article 7 Profit from entrepreneurial activity

1. The profits of an enterprise of a Contracting State are taxable only in that State, unless that enterprise carries on business in the other Contracting State through a permanent establishment (representative office) located there. If an enterprise carries on business as described above, the profits of such enterprise may be taxed in the other Contracting State, but only to the extent that relates to:

(a) Such permanent establishment (mission);

(b) The sale in that other Contracting State of goods or merchandise that are similar or identical to goods or merchandise sold through a permanent establishment (representative office); or

(c) Other business activities carried on in that other Contracting State which are similar or identical in nature to business activities carried on through a permanent establishment (representative office).

2. Subject to the provisions of paragraph 3 of this article, if an enterprise of one Contracting State carries on business in the other Contracting State through a permanent establishment (representative office) located there, then in each Contracting State such permanent establishment (representative office) includes the profits that it could receive if it were a separate and independent enterprise engaged in the same or similar activity, under the same or similar conditions, and operated in complete independence from the enterprise, of which it is a permanent establishment (representative office).

3. In determining the profits of a permanent establishment (representative office), expenses incurred for the purposes of the permanent establishment (representative office), including administrative and general administrative expenses, may be deducted, regardless of whether they are incurred in or outside the Contracting State in which the permanent establishment (representative office) is located, within the framework of the norms established by the domestic legislation of that State..

4. If a Contracting State permits the determination of profits attributable to a permanent establishment (representative office) by distributing the total profits of the enterprise among its various subdivisions or on the basis of direct and indirect methods, nothing in paragraph 2 of this article shall prevent that Contracting State from determining taxable profits by such distribution or on the basis of direct and indirect indirect methods based on common practice.

5. No profit is credited to a permanent establishment (representative office) based solely on the purchase by that permanent establishment (representative office) of goods or merchandise for the enterprise.

6. If profits include types of income that are specifically mentioned in other articles of this Convention, the provisions of these articles shall not be affected by the provisions of this article.

7. For the purposes of the preceding paragraphs, profits related to a permanent establishment (representative office) are determined annually in the same way, unless there are sufficient and compelling reasons to change this procedure.

The footnote. Article 7 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 8 Sea and air transport

1. Profits earned by a resident of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

2. For the purposes of this article, profits derived from the operation of ships and aircraft in international traffic include in particular:

(a) Income derived from the rental of crewless ships and aircraft; and

b) profits from the use, maintenance or rental of containers (including trailers and related container transportation equipment) used to transport goods or merchandise in the case of,

if such leasing or use, maintenance or leasing is a non-core activity in relation to the operation of ships and aircraft in international traffic.

3. The provisions of paragraphs 1 and 2 of this article shall also apply to profits from participation in a pool, joint venture or international organization for the operation of ships and aircraft.

Article 9 Associated enterprises

1. In the case when

(a) An enterprise of one Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or

b) the same persons are directly or indirectly involved in the management, control or capital of an enterprise of one Contracting State and an enterprise of the other Contracting State,

and in each case, conditions are created or established between two enterprises in their commercial and financial relationships that are different from those that would take place between two independent enterprises, then any profit that could have been credited to one of them, but due to the presence of these conditions was not credited to him, can be included included in the profits of this enterprise and, accordingly, taxed.

2. In the case where one Contracting State includes in the profits of an enterprise of that State, it taxes accordingly - profits in respect of which an enterprise of the other Contracting State has been taxed in that other State and the profits thus included are profits that would have accrued to an enterprise of the first-mentioned State if the relationship between the two enterprises had been the same as between two independent enterprises, then that other State may make appropriate adjustments in the amount of tax levied on this profit. In determining such an adjustment, the other provisions of this Convention should be considered, and the competent authorities of the Contracting States will consult with each other, if necessary.

Article 10 Dividends

1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, according to the laws of that State, but if the recipient is the beneficial owner of the dividends, the tax so charged will not exceed 10 percent of the total amount of the dividends.

This clause does not affect the taxation of the company in respect of the profits from which the dividends are paid.

3. The term "dividends", as used in this article, means income from shares or other rights, other than debt claims, entitled to profit-sharing, as well as income from other corporate rights, which is subject to the same tax treatment as income from shares under the laws of the Contracting State of which you are a resident. a company that distributes profits.

4. The provisions of paragraphs 1 and 2 of this article shall not apply if the beneficial owner of the dividends, being a resident of one Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident through a permanent establishment (representative office) located there, or provides independent personal services in that other State with a permanent the base, and the holding company in respect of which dividends are paid, it really refers to such a permanent establishment (representative office) or permanent base. In such a case, the provisions of article 7 or 14 of this Convention shall apply, as appropriate.

5. In the event that a company that is a resident of one Contracting State receives profits or income from the other Contracting State, that other State may completely exempt from taxes the dividends paid by that company, except if those dividends are paid to a resident of that other State or if the holding company in respect of which the dividends are paid actually relates to a permanent establishment (representative office) or permanent base located in that other State, and may not tax the profits of the company., even if dividends are paid or retained earnings consist wholly or partly of profits or income generated in that other State.

6. Nothing in this Convention may be interpreted as preventing a Contracting State from taxing the net profits of a company relating to a permanent establishment in that State in addition to the tax that is levied on the profits of a company that is a national of that State, provided that any additional tax so assessed, it will not exceed 2 percent of the amount of such profit, which was not subject to such additional taxation in previous taxable years. For the purposes of this paragraph, profits shall be determined after deduction of all taxes other than the additional tax referred to in this paragraph levied in the Contracting State in which the permanent establishment is located.

Article 11 Interest

1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in the Contracting State in which it arises according to the laws of that State, but if the recipient is the beneficial owner of the interest, the tax so charged will not exceed 10 per cent of the total amount of the interest.

3. Notwithstanding the provisions of paragraph 2 of this article, interest arising in a Contracting State shall be exempt from taxation in that Contracting State if the beneficial owner of the interest is:

(a) In the case of Kazakhstan:

(i) The Government,

(ii) a central or local authority,

(iii) The National Bank,

(iv) any other financial institution wholly owned by another Contracting State;

(b) In the case of Azerbaijan:

(i) The Government,

(ii) a central or local authority,

(iii) The Central Bank,

(iv) any other financial institution wholly owned by another Contracting State.

4. The term "interest", as used in this article, means income from debt claims of any kind, secured or unsecured and giving or not giving the right to participate in debtors' profits, and in particular income from government securities and income from bonds or debentures, including premiums and winnings on these securities. securities, bonds, or debentures. Penalties for late payments are not considered as interest for the purposes of this article.

5. The provisions of paragraphs 1 and 2 of this article shall not apply if the beneficial owner of the interest, being a resident of one Contracting State, carries on business in the other Contracting State in which the interest arises through a permanent establishment (representative office) located there, or provides independent personal services in that other State from a permanent base located there, and The claim on the basis of which interest is paid is valid for such a permanent establishment (representative office) or permanent base. In such a case, the provisions of article 7 or article 14 of this Convention shall apply, as appropriate.

6. Interest shall be deemed to arise in a Contracting State if the payer is a resident of that Contracting State. If, however, the person paying the interest, regardless of whether he is a resident of a Contracting State or not, has a permanent establishment or permanent base in a Contracting State in connection with which an obligation to pay interest arises, and the costs of such interest are borne by a permanent establishment or permanent base, Such interest shall be deemed to arise in the Contracting State in which such permanent establishment (representative office) or permanent base is located.

7. If, due to a special relationship between the payer and the actual owner of the interest, or between both of them and any third party, the amount of interest relating to the debt claim on the basis of which it is paid exceeds the amount that would have been agreed between the payer and the actual owner of the interest in the absence of such a relationship, the provisions of this article shall apply only to the last mentioned amount. In such a case, the excess part of the payment is subject to taxation in accordance with the laws of each Contracting State, taking into account the other provisions of this Convention.

8. The provisions of this article shall not apply if the main purpose or one of the main purposes of any person involved in the creation or transfer of debt claims in respect of which interest is paid was to benefit from this article by creating or transferring these debt claims.

The footnote. Article 11 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 12 Royalties

1. Royalties arising in one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such royalties may also be taxed in the Contracting State in which they arise, according to the laws of that State, but if the recipient is the beneficial owner of the royalties, the tax so charged shall not exceed 10 percent of the total amount of the royalties.

3. The term "royalties", as used in this article, means payments of any kind received as remuneration for the use or for granting the right to use copyrights of works of literature, art or science, software, cinematographic films, any patent, trademark, design or model, plan, secret formula or process, or for information related to industrial, commercial or scientific experience, or for the use or grant of the right to use industrial, commercial or scientific equipment.

4. The provisions of paragraphs 1 and 2 of this Article shall not apply if the beneficial owner of the royalties, being a resident of one Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment (representative office) located there, or provides independent personal services in that other State from a permanent base located there., and the right or property in respect of which royalties are paid is actually connected with such permanent establishment (representative office) or permanent base. In such a case, the provisions of articles 7 or 14 of this Convention shall apply, as appropriate.

5. Royalties shall be deemed to arise in a Contracting State if the payer is a resident of that Contracting State. If, however, the person paying the royalties, regardless of whether he is a resident of a Contracting State or not, has a permanent establishment (representative office) or a permanent base in a Contracting State, in connection with which the obligation to pay royalties arises, and the costs of such royalties are borne by a permanent establishment (representative office) or a permanent base, then Royalties are considered to arise in the Contracting State in which the permanent establishment (representative office) or permanent base is located.

6. If, due to a special relationship between the payer and the actual owner of the royalty or between both of them and any other person, the amount of the royalty related to the use, right or information on the basis of which it is paid exceeds the amount that would have been agreed between the payer and the actual owner of the royalty in the absence of such a relationship, then The provisions of this article apply only to the last mentioned amount. In such a case, the excess part of the payment shall be taxable in accordance with the laws of each Contracting State, with due regard to the other provisions of this Convention.

7. The provisions of this article shall not apply if the primary purpose or one of the primary purposes of any person involved in the creation or transfer of rights in respect of which royalties are paid was to benefit from this article through such creation or transfer of rights.

The footnote. Article 12 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 13 Income from alienation of property

1. Income earned by a resident of a Contracting State from the alienation of immovable property as defined in article 6 of this Convention and located in the other Contracting State may be taxed in that other State.

2. Income derived from the alienation of movable property forming part of the business property of a permanent establishment (representative office) that an enterprise of one Contracting State has in the other Contracting State, or from movable property belonging to a permanent base held by a resident of one Contracting State in the other Contracting State for the purpose of providing independent personal services, including income from the alienation of such permanent establishment (representative office) (alone or in combination with an entire enterprise) or such permanent base, may be taxed in that other State.

3. Income earned by a resident of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property related to the operation of such aircraft or ships shall be taxable only in that Contracting State.

4. Income earned by a resident of a Contracting State from the alienation of shares, interests or other rights in the capital of a company, the value of which is more than 50 percent directly or indirectly related to immovable property located in the other Contracting State, may be taxed in that other Contracting State.

5. Gains from the alienation of any property other than that provided for in the preceding paragraphs of this article shall be taxable only in the Contracting State of which the alienator is a resident.

The footnote. Article 13 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 14 Independent personal services

1. Income earned by a resident of a Contracting State in respect of professional services or other activities of an independent nature shall be taxable only in that Contracting State, except in the following cases, in which such income may also be taxed in the other Contracting State:

(a) If he has a permanent base at his disposal in the other Contracting State for the purpose of carrying out his activities; in this case, only that part of the income which relates to that permanent base; or

b) if he stays in the other Contracting State for a period or periods exceeding a total of 183 days in any twelve-month period; in this case, only that part of the income that is derived from activities carried out in that other Contracting State.

2. The term "professional services" includes, in particular, the independent activities of doctors, lawyers, engineers, architects, dentists, and accountants.

3. For the purposes of this Convention, the term "permanent base" means in particular a permanent location (such as a room, office or office) through which the activities of a person providing independent personal services are carried out in whole or in part.

The footnote. Article 14 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 15 Dependent personal services

1. Subject to the provisions of articles 16, 18 and 19 of this Convention, salaries, wages and other similar remuneration derived by a resident of a Contracting State in connection with an employment shall be taxable only in that State, unless the employment is performed in the other Contracting State. If the employment is performed in this way, the remuneration received in connection with it may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1 of this article, remuneration derived by a resident of a Contracting State in connection with an employment performed in the other Contracting State shall be taxable only in the first-mentioned State if:

(a) The recipient is present in that other Contracting State for a period or periods not exceeding a total of 183 days in any twelve-month period beginning or ending in the relevant tax year; and

(b) The remuneration is paid by, or on behalf of, an employer who is not a resident of another State; and

c) the remuneration costs are not borne by a permanent establishment (representative office) or a permanent base that the employer has in another State.

3. Notwithstanding the preceding provisions of this article, remuneration derived in connection with an employment performed on board a ship or aircraft operated in international traffic may be taxed in the Contracting State of which the enterprise operating the ship or aircraft is a resident.

Article 16 Directors' fees

Directors' fees and other similar payments received by a resident of a Contracting State in his capacity as a member of the board of directors or a similar body of a company that is a resident of the other Contracting State may be taxed in that other State.

Article 17 Artists and athletes

1. Notwithstanding the provisions of articles 14 and 15 of this Convention, income earned by a resident of a Contracting State as an artist, such as a theater, film, variety, radio or television artist, or a musician, or as an athlete, from his personal activities carried on in the other Contracting State, may be taxed in that other State..

The footnote. Article 11 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 12 Royalties

1. Royalties arising in one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

The footnote. Article 12 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 13 Income from alienation of property

The footnote. Article 13 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 14 Independent personal services

2. The term "professional services" includes, in particular, the independent activities of doctors, lawyers, engineers, architects, dentists, and accountants.

The footnote. Article 14 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 15 Dependent personal services

(a) The recipient is present in that other Contracting State for a period or periods not exceeding a total of 183 days in any twelve-month period beginning or ending in the relevant tax year; and

(b) The remuneration is paid by, or on behalf of, an employer who is not a resident of another State; and

c) the remuneration costs are not borne by a permanent establishment (representative office) or a permanent base that the employer has in another State.

Article 16 Directors' fees

Article 17 Artists and athletes

2. If income from personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income, notwithstanding the provisions of articles 7, 14 and 15 of this Convention, shall be taxable in the Contracting State in which the activities of the entertainer or sportsman are carried on.

Article 18 Pensions

Subject to the provisions of paragraph 2 of article 19 of this Convention, pensions and other similar remuneration paid to a resident of a Contracting State in respect of past employment shall be taxable only in that State.

Article 19 Public service

1. (a) Remuneration, other than a pension, paid by a Contracting State or its administrative-territorial subdivision or local authority to any natural person in respect of services rendered to that Contracting State or its administrative-territorial subdivision, central or local authority shall be taxable only in that State.

(b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:

(i) Is a national of that State; or

ii) has not become a resident of that State solely for the purpose of performing his service.

2. (a) Any pension paid by, or from funds created by, a Contracting State or an administrative-territorial subdivision or local authority to an individual in respect of services rendered to that State or its subdivision or authority shall be taxable only in that State.

(b) However, such pension is taxable only in the other Contracting State if the individual is a resident of and a national of that State.

3. The provisions of articles 15, 16 and 18 of this Convention shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or an administrative-territorial subdivision or local authority thereof.

The footnote. Article 19 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 20 Students

Payments received by a student, graduate student or a person undergoing professional training who are or were, immediately prior to arrival in one Contracting State, residents of the other Contracting State and are located in the first-mentioned State solely for the purpose of study or education and internship and intended for residence, study and education, shall not be taxed in the following cases: in that first-mentioned State, provided that such payments originate from sources outside that State.

Article 21 Other income

1. Types of income not mentioned in the preceding articles of this Convention arising in one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such income may also be taxed in the Contracting State in which it arises.

3. The provisions of paragraphs 1 and 2 of this article shall not apply to income other than income from immovable property defined in paragraph 2 of Article 6 of this Convention if the recipient of such income is a resident of one Contracting State, carries on business in the other Contracting State through a permanent establishment (representative office) located therein and provides services in that other State. Independent personal services from a permanent base located there, and the right or property in connection with which income is received, they are indeed associated with such a permanent establishment (representative office) or permanent base. In such a case, the provisions of article 7 or article 14 of this Convention shall apply, as appropriate.

Article 22 Property

The footnote. Article 22 is excluded by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 23 Elimination of double taxation

1. In the case of Kazakhstan, double taxation is eliminated as follows:

a) if a resident of Kazakhstan earns income that, in accordance with the provisions of this Convention, may be taxed in Azerbaijan, Kazakhstan will allow an amount equal to the income tax paid in Azerbaijan to be deducted from the tax on such resident's income.

In any case, such a deduction should not exceed the amount of tax that would be charged on such income at the rates applicable in Kazakhstan.

(b) If a resident of Kazakhstan receives income that, in accordance with the provisions of this Convention, is taxable only in Azerbaijan, Kazakhstan may include that income in the tax base, but only for the purpose of determining the tax rate on such other income as is taxable in Kazakhstan.

2. In the case of Azerbaijan, double taxation will be eliminated as follows:

If a resident of Azerbaijan receives income that, in accordance with the provisions of this Convention, may be taxed in Kazakhstan, the amount of tax on that income paid in Kazakhstan shall be deductible from the tax levied on such income by a resident in Azerbaijan. Such deduction, however, will not exceed the amount of Azerbaijan's tax on such income calculated in accordance with its tax legislation.

The footnote. Article 23 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 24 Non-discrimination

1. Nationals of one Contracting State shall not be subjected in the other Contracting State to taxation or related obligations other or more burdensome than taxation or related obligations to which nationals of that other State are or may be subjected in the same circumstances. This provision also applies, irrespective of the provisions of article 1 of this Convention, to natural persons who are not residents of one or both of the Contracting States.

2. Stateless persons who are residents of a Contracting State shall not be subject in either Contracting State to any taxation or related obligations other or more burdensome than taxation and related obligations to which nationals of that State are or may be subject under the same conditions.

3. The taxation of a permanent establishment (representative office) which an enterprise of one Contracting State has in the other Contracting State shall not be less favourable in that other State than the taxation of enterprises of that other State carrying on similar activities in that other State. This provision should not be interpreted as obliging one Contracting State to provide residents of the other Contracting State with any personal benefits, deductions and tax rebates based on their civil status or family obligations, which it provides to its own residents.

4. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, paragraph 6 of Article 12 apply, interest, royalties and other payments made by an enterprise of one Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they were paid to a resident of the first mentioned State.

5. Enterprises of a Contracting State whose capital is wholly or partly owned by one or more residents or controlled directly or indirectly by one or more residents of the other Contracting State shall not be subject in the first-mentioned State to any taxation or any obligations related thereto that are other or more burdensome than taxation and related obligations, to which other similar enterprises of the first mentioned State are or may be subjected.

6. The provisions of this article shall apply to taxes to which this Convention applies.

Article 25 Mutual consent procedure

1. If a person considers that the actions of one or both of the Contracting States lead or will lead to his taxation not in accordance with the provisions of this Convention, he may, regardless of the remedies provided for by the domestic laws of those States, submit his case for consideration to the competent authorities of the Contracting State of which he is a resident, or, if his case It falls under paragraph 1 of article 24 of the Contracting State of which it is a national. The application must be submitted within three years from the date of the first notification of actions leading to taxation not in accordance with the provisions of this Convention.

2. The competent authority shall endeavour, if it considers the claim to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the matter by mutual agreement with the competent authority of the other Contracting State with a view to avoiding taxation not in accordance with the provisions of this Convention. Any agreement reached must be implemented regardless of any time limits available in the domestic laws of the Contracting States.

3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Convention. They may also consult with each other with a view to eliminating double taxation in cases not provided for by this Convention.

4. The competent authorities of the Contracting States may enter into direct contact with each other in order to reach an agreement and understanding of the preceding paragraphs.

Article 26 Exchange of information

1. The competent authorities of the Contracting States shall exchange information necessary for the implementation of the provisions of this Convention or the administration or application of national legislation relating to taxes of any kind and description levied on behalf of the Contracting States, their administrative-territorial subdivisions, central or local authorities, insofar as taxation does not contradict this Convention.. The exchange of information is not limited to articles 1 and 2 of this Convention.

2. Any information received by a Contracting State in accordance with paragraph 1 of this Article shall be considered confidential, as well as information received in accordance with the national legislation of that Contracting State, and shall be disclosed only to persons or authorities (including courts and administrative authorities) engaged in both assessment or collection, enforcement or prosecution, or consideration of appeals in respect of taxes referred to in paragraph 1 of this article, as well as supervision of all of the above. Such persons or authorities may use the information only for such purposes. They may disclose information during an open court hearing or when making court decisions.

3. The provisions of paragraphs 1 and 2 of this article may not be interpreted as imposing obligations on a Contracting State.:

(a) To take administrative measures contrary to the laws and administrative practices of that or another Contracting State;

(b) To provide information that cannot be obtained under the laws or in the ordinary course of the administration of that or the other Contracting State;

c) provide information that would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to government policy (ordre public).

4. If information is requested by one Contracting State in accordance with this Article, the other Contracting State shall take measures to collect the requested information, even if such information is not required by that other Contracting State for its own tax purposes. The obligation contained in the previous sentence is subject to the limitations of paragraph 3 of this article, but such limitations cannot be interpreted as allowing a Contracting State to refuse to provide information solely because of a lack of domestic interest in such information.

5. The provisions of paragraph 3 of this Article may not be interpreted as authorizing a Contracting State to refuse to provide information solely because the holder of the information is a bank, another financial institution, a nominee holder or a person acting as an agent or attorney, or because the information concerns a person with ownership rights.

The footnote. Article 26 as amended by the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 27 Assistance in tax collection

1. The competent authorities of the Contracting States shall assist each other in the collection of taxes, this provision not being limited by the provisions of Article 2 of this Convention.

2. Nothing in this article may be interpreted as obliging a Contracting State to apply administrative measures other than those used in the collection of its own taxes or contrary to its usual practice.

3. Practical actions for the application of this Article will be determined by an Agreement between the Governments of the Contracting States on Cooperation and Mutual Assistance in matters of compliance with tax Legislation.

Article 28 Members of diplomatic missions and consular institutions

Nothing in this Convention affects the tax privileges of members of diplomatic missions and consular posts granted by the general rules of international law or in accordance with the provisions of special agreements.

Article 28-1 Limitation of benefits

1. In no case shall the provisions of this Convention prohibit a Contracting State from applying the provisions of its national legislation and measures against tax evasion or evasion actually described as such.

2. A resident of a Contracting State shall not be entitled to the application of this Convention if his affairs were arranged as if the main purpose or one of the main purposes was to benefit from this Convention.

The footnote. The Convention is supplemented by Article 28-1 in accordance with the Law of the Republic of Kazakhstan dated 28.02.2018 No. 141-VI.

Article 29 Entry into force

1. This Convention is subject to ratification and will enter into force on the 30th day after the date of the last notification indicating that both Contracting States have completed the procedures for its entry into force provided for by the domestic law of each State, and its provisions will apply.:

(a) Taxes withheld at source in respect of amounts paid or deductible on or after the first of January of the calendar year following the year of entry into force of the Convention; and

(b) Other taxes in respect of the taxable period beginning on or after the first of January of the calendar year following the year in which the Convention enters into force.

Article 30 Termination

This Convention shall remain in force until terminated by one of the Contracting States. Each Contracting State may terminate the Convention after the end of 5 years from the date of entry into force of the Convention by notifying in writing through diplomatic channels of the termination of the Convention no later than six months before the end of any calendar year. In this case, the Convention is terminated.:

(a) In respect of taxes withheld at source for amounts paid or deductible on or after the first of January of the year following the year in which the notice of termination was given; and

(b) In respect of other taxes, for the taxable period beginning on or after the first of January of the year following the year in which the notice of termination was given.

Done in Baku on September 16, 1996, in two copies, each in the Kazakh, Azerbaijani and Russian languages, all texts being equally authentic. In case of divergence in interpretation of the provisions of this Convention, the Russian text will be decisive.

For the Government

Republic of Kazakhstan

The Republic of Azerbaijan

President

Republic of Kazakhstan

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