Tax Convention Signed Between Canada and Azerbaijan

September 13, 2004

A Convention between Canada and Azerbaijan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital was signed on September 7, 2004, in Baku.

The Convention limits the rate of withholding tax to 10% for dividends between affiliated companies, 15% for dividends in all other cases, 10% for interest, 5% for royalties regarding computer software, patents, or information concerning industrial, commercial or scientific experience, and 10% for royalties in all other cases.

The Convention will enter into force once Canada and Azerbaijan have notified each other that all the necessary measures to give the Convention the force of law in their respective countries have been completed. The Convention will have effect, in respect of tax withheld at source on amounts paid or credited to non-residents, as of the beginning of the first calendar year following that in which the Convention enters into force; and, in respect of other taxes, for taxation years beginning after the calendar year in which the Convention enters into force.

For further information contact:

Tax Legislation Division
Phone: 613-369-4016