Azerbaijan & Malta Double Tax Treaty

A double tax treaty between Malta and the Republic of Azerbaijan was signed on 29 April 2016 and published on 10 June 2016. It entered into force from 27 December 2016.

Some of the main features of the treaty are the following:

Elimination of double taxation

Double taxation is eliminated by the allowance of a credit for any tax suffered in the source country against the tax liability for that income in the residence country.

Taxation of dividends

The double tax treaty between Malta and Azerbaijan sets out a maximum withholding tax of 8 per cent on a payment of dividends from a company in Azerbaijan to a shareholder resident in Malta, who is the beneficial owner thereof.

No withholding tax is charged on dividends paid by a company in Malta to a shareholder resident in Azerbaijan (as a result of domestic law provisions).

Taxation of interest

The double tax treaty between Malta and Azerbaijan sets out a maximum withholding tax of 8 per cent on interest paid to the beneficial owner thereof.

No withholding tax is charged on interest paid by a Malta resident person to a person resident in Azerbaijan (as a result of domestic law provisions).

Taxation of royalties

The double tax treaty between Malta and Azerbaijan sets out a maximum withholding tax of 8 per cent on royalties paid to the beneficial owner thereof.

No withholding tax is charged on royalties paid by a Malta resident person to a person resident in Azerbaijan (as a result of domestic law provisions).

Artistes and Sportsmen

Income derived by a person from entertainment or sports may be taxed in the state where the activities are exercised.

Pensions

Pensions and similar remuneration in consideration of past employment (other than pensions paid by or out of funds created by a state or administrative-territorial subdivision/local authority in respect of services rendered to that state or administrative-territorial subdivision/local authority) shall be taxable in the country of residence only.

Other income

Income not specifically dealt with in the Malta Azerbaijan double tax treaty shall be taxable in the country of residence only.

Should you need any further information on the Malta Azerbaijan double tax treaty and the potential tax optimisation opportunities that may arise there for companies and individuals based in the Ukraine and Malta, please contact us on info@papilioservices.com.