The State Tax Service has published a consolidated version of its tax treaty with Belgium reflecting changes under the MLI based on each country’s submitted reservations and notifications.
Azerbaijan’s State Tax Service (STS) has released the consolidated versions of its tax treaty with Belgium reflecting the changes introduced by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
These consolidated texts have been prepared based on the reservations and notifications submitted to the Depositary by the respective countries.
Azerbaijan-Belgium Tax Treaty (2004)
Taxes covered
The Convention applies to all income and capital taxes imposed by Azerbaijan or Belgium, including taxes on total income, capital, property gains, wages, and capital appreciation. Specifically, it covers Azerbaijan’s profit, personal income, property, and land taxes, and Belgium’s individual, corporate, non-resident, and crisis-related taxes. It also extends to any new taxes that are substantially similar, with the authorities of both countries required to notify each other annually of significant changes in tax legislation.
Withholding rates
- Dividends: Dividends paid to a resident of the other Contracting State may be taxed in both States. If the recipient is the beneficial owner, source-state tax is capped at 5–15% depending on ownership and investment size. Dividends connected to a permanent establishment or fixed base are exempt, with Articles 7 or 14 applying.
- Interest: Interest may be taxed in both States, with source-state tax limited to 10% for beneficial owners. Exemptions include short-term commercial loans, export-promoting bonds, and State payments. Interest connected to a permanent establishment or fixed base is taxed in the country of the permanent establishment or fixed base, and anti-abuse rules apply.
- Royalties: Royalties may be taxed in both States, with source-state tax capped at 5% for literary/artistic works and 10% for others. Royalties linked to a permanent establishment or fixed base are exempt.
The MLI applies to withholding taxes on payments to non-residents for events occurring on or after 1 January 2025, and to all other taxes levied by either Contracting State on taxable periods beginning on or after 1 July 2025.
