Azerbaijan: Published Amendments to Tax Code relatinged to withholding tax regime

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In Azerbaijan, Law No. 454-VQD of 16 December 2016 (the Law) introducing certain amendments to the Tax Code has been published in the Official Gazette No. 287 (7431) on 25 December 2016.

The Law introduces certain amendments to the withholding tax regime. According to the Law, direct or indirect payments made by non-residents to their entities established or registered in jurisdictions with favourable tax regimes to which controlled foreign companies (CFC) rules apply will be considered as Azerbaijan-sourced income and will be subject to 10% withholding tax.

The Cabinet of Ministers will provide each year, before 20 December, a list of jurisdictions with favourable tax regimes to which CFC rules would apply in the following year.  Accordingly, the Cabinet of Ministers is expected to provide the 2017 CFC jurisdictions list to the President by January 2017.

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