BAKU, Azerbaijan, January 7. The Tax Code of Azerbaijan has been amended to stimulate investment environment and entrepreneurial activity, as well as to reduce the tax burden on business entities; in particular, the rate of tax withheld at the source of payment from the net profit of the permanent representative office of a non-resident has been reduced, Trend reports via Azerbaijan's State Tax Service.
To note, last year, the withholding tax rate on dividends was adjusted from 10 percent to 5 percent. Additionally, the previous tax exemptions applicable to state and local governments, budgetary organizations, and public entities with legal rights established on behalf of the state concerning dividend income were substituted with a flat tax rate of 5 percent.
“This decision is aimed at accelerating the process of turning our country into a state with a favorable investment environment in the region, stimulating the attraction of equity investments in the capital markets, and creating a stable and low-rate tax environment for investors who are not participants in the capital markets.
According to the amendments that came into force this year, in order to create equal economic conditions for residents, the rate of tax withheld at the source of payment from the net profit of the permanent establishment of a non-resident was reduced from 10 percent to 5 percent on the amount transferred to this non-resident,” the statement of the service reads.
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