December 27, 2022
Ministry of Finance
New Tax Convention with Azerbaijan was Signed
[Provisional translation]
1. Today, the Government of Japan and the Government of the Republic of Azerbaijan signed the “Convention between Japan and the Republic of Azerbaijan for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance” in Baku. 2. This Convention wholly amends the existing Convention (Convention between the Government of Japan and the Government of the Union of Soviet Socialist Republics for the Avoidance of Double Taxation with respect to Taxes on Income), which entered into force in 1986, by revising the taxation on business profits, expanding the extent of reduction of taxation on investment income, introducing measures for prevention of abuse of this Convention and assistance in the collection of tax claims, and reinforcing the exchange of information concerning tax matters. It is expected that, while eliminating double taxation and preventing international tax evasion and tax avoidance, this Convention promotes further mutual investments and economic exchanges between the two countries.
* This Convention will not affect the existing Convention applicable between Japan and the countries other than the Republic of Azerbaijan.
【Reference 1】 Next Steps
After the completion of the domestic procedures in each of the two countries (in Japan, approval by the Diet is necessary), each of the two countries shall send through diplomatic channels to the other country the notification confirming the completion of its internal procedures. This Convention will enter into force on the thirtieth day after the date of receipt of the latter notification and will have effect:
(a) in Japan:
(i) with respect to taxes levied on the basis of a taxable year, for taxes for any taxable years beginning on or after 1 January in the calendar year next following that in which this Convention enters into force;
(ii) with respect to taxes levied not on the basis of a taxable year, for taxes levied on or after 1 January in the calendar year next following that in which this Convention enters into force;
(b) in the Republic of Azerbaijan:
(i) with respect to taxes withheld at source, for income derived on or after 1 January in the calendar year next following that in which this Convention enters into force;
(ii) with respect to other taxes, for taxes chargeable for any fiscal year beginning on or after 1 January in the calendar year next following that in which this Convention enters into force.
The provisions concerning the exchange of information and the assistance in the collection of taxes will have effect from the date of entry into force of this Convention without regard to the date on which the taxes are levied or the taxable year to which the taxes relate.【Reference 2】 Texts and Key Points of the Convention
・“Convention between Japan and the Republic of Azerbaijan for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance”（Japanese(PDF:217KB)
・English(PDF:249KB)） ・Key Points of New Tax Convention with Azerbaijan