All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

FYR Macedonia: FYR Macedonia - Azerbaijan treaty enters into force


Elena Kostovska, Eurofast Global

Speedy ratifications of the treaty between FYR Macedonia and Azerbaijan have ensued from both parties recently. The Azerbaijani Parliament ratified the treaty on June 21 2013 while the FYR Macedonian Parliament followed suit just a month later. The ratifications both come shortly after the signing of the treaty which was concluded in April this year.

The treaty covers the personal income tax, property tax and profit tax in FYR Macedonia and the tax on income of physical persons, tax on profit of legal persons, tax on property and land tax in Azerbaijan. As usual the treaty is mostly harmonised with the OECD model with the below specifics that can be observed in the treaty's content.

Permanent establishments are deemed to arise when a building/construction site or an installation project (including any related site activity of supervisory or consulting nature) lasts for more than 12 months.

As far as withholding taxes are concerned, the treaty stipulates rates which slightly deviate from what FYR Macedonian treaties usually define; dividends are taxed at 8% (no preferential rate related to a minimum capital participation has been prescribed). The same 8% withholding tax rate on interest has been agreed on, which is also applicable to royalties.

Income from employment, pensions, and artists/sportsmen income articles of the treaty are fully harmonised with the OECD model treaty.

In regards to the provisions about elimination of double taxation, the treaty stipulates that both FYR Macedonia and Azerbaijan will allow deduction from taxes in the amount of tax paid on it on the other state.

The treaty has entered into force on July 30 2013 (Official Gazette No.107) and will be applicable for all types of affected taxes in both countries as of January 1 2014.

Elena Kostovska (

Eurofast Global, Skopje Office, FYR Macedonia

Tel: +389 2 2400225


more across site & bottom lb ros

More from across our site

This week Brazil’s former President Luiz Inacio Lula da Silva came out in support of uniting Brazil’s consumption taxes into one VAT regime, while the US Senate approved a corporate minimum tax rate.
The Dutch TP decree marks a turn in the Netherlands as the country aligns its tax policies with OECD standards over claims it is a tax haven.
Gorka Echevarria talks to reporter Siqalane Taho about how inflation, e-invoicing and technology are affecting the laser printing firm in a post-COVID world.
Tax directors have called on companies to better secure their data as they generate ever-increasing amounts of information due to greater government scrutiny.
Incoming amendments to the treaty could increase costs on non-resident Indian service providers.
Experts say the proposed minimum tax does not align with the OECD’s pillar two regime and risks other countries pulling out.
The Malawian government has targeted US gemstone miner Columbia Gem House, while Amgen has successfully consolidated two separate tax disputes with the Internal Revenue Service.
ITR's latest quarterly PDF is now live, leading on the rise of tax technology.
ITR is delighted to reveal all the shortlisted firms, teams, and practitioners for the 2022 Americas Tax Awards – winners to be announced on September 22
‘Care’ is the operative word as HMRC seeks to clamp down on transfer pricing breaches next year.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree