BAKU, Azerbaijan, January 1. Dividends paid by non-resident organizations to Azerbaijani residents will now be taxed at a rate of 5%, Trend reports.
The change is reflected in amendments to the Tax Code, approved by President Ilham Aliyev.
Previously, individuals who are residents of Azerbaijan were required to declare and pay tax on non-commercial income received abroad at a rate of 14%. Experts noted that the higher rate often encouraged the use of offshore or favorable tax jurisdictions, contributed to unreported income, and slowed the repatriation of funds to Azerbaijan, limiting capital inflows and investment potential.
Reducing the rate from 14 to 5% is expected to encourage voluntary declaration of foreign income, expand the tax base, and incentivize the return of financial assets and investments to the country. Despite the lower rate, authorities anticipate an increase in overall state budget revenues.
The previous 14% tax applied to annual non-commercial income, financial assistance, bonuses, pensions for non-employed individuals, fees paid to mediators, and income received by lawyers working for law firms under civil law contracts.
These amendments came into effect on January 1, 2026.