Attention to individuals receiving income from abroad: important changes are coming into force

From the new year, changes to the Tax Code regarding income in the form of dividends received from abroad will come into effect. The tax rate on such income will be reduced from 14% to 5% - almost three times.

Previously, individuals were required to file a declaration and pay 14% tax, taking into account tax withheld abroad. The innovation is aimed at encouraging citizens to voluntarily declare foreign income.

Azerbaijan exchanges tax information with a number of countries, so individuals who have not declared their income are identified and registered, and unpaid taxes are collected. According to the legislation, individuals are obliged to declare dividend income received abroad and be registered for tax purposes. If a confirming document on tax payment abroad is provided, in most cases, no additional tax liabilities arise in Azerbaijan.

Economist Emin Sattarov notes that in many countries the dividend tax exceeds 5%. According to him, a citizen must register for tax in advance, submit a declaration by March 31 of the following year, attaching confirmation of tax payment abroad - then this amount will be taken into account when calculating the tax.

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