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Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.



At the time of signing this Convention between the Federal Republic of Germany and the Republic of Azerbaijan for the Avoidance of Double Taxation with respect to taxes on Income and on Capital, the undersigned have agreed on the following provisions which shall be an integral part of this Convention

(1) With reference to Articles 3, 4, 8, 13, 15, and 22:

In determining a "place of effective management," among those conditions that must be taken into account is the actual location from where the enterprise is managed or governed.

(2) With reference to Article 4:

An enterprise shall be deemed to be a resident in that State where its place of effective management is situated.

(3) With reference to paragraph (5) of Article 5:

Where an individual is legally empowered to negotiate for an enterprise all details of binding contracts in one Contracting State, it is to be assumed that the individual exercises full legal authority in that State, even in case where the other person signs the contract in the other Contracting State, where the enterprise is situated.

(4) With reference to Article 7:

  • (a) Where an enterprise of a Contracting State sells goods or merchandise through a permanent establishment in the other Contracting State, or engages in a business therein, the profits of such enterprise shall not be determined on the basis of the total profits realized by the that enterprise, but only on the basis of the portion thereof earned by that permanent establishment;
  • (b) Where an enterprise has a fixed place of business in another Contracting State, then in case of contracts, especially those for the design, delivery, installation, or construction of commercial, mercantile, or scientific equipment or facilities, or public contracts, the profits derived from such fixed place of business shall not be taxable on the basis of the total contract price, but on the basis of the value of that portion of the contract which is actually carried out in that Contracting State in which the fixed place of business is located. Profits from deliveries to that place of business or those profits derived from that portion of the contract carried out in the Contracting State where the primary seat of that enterprise is located shall be taxable in that State.
  • (c) Remuneration for technical services including remuneration for studies or design proposals of a scientific, geological, or technical nature, or for construction contracts, including the associated blueprints, or for consulting or for conducting supervisory services, shall be deemed to represent remuneration subject to Article 7 and Article 14  of this Convention.

(5) With reference to paragraph (3) of Article 10:

The term "dividends" refers to income as derived from sources shall be deemed to be legally equivalent to shares or stock certificates in the Contracting State in which the enterprise paying those dividends are situated, including participation shares on investment capital.

(6) With reference to Articles 10 and 11:

Notwithstanding Articles 10 and 11, dividends and interest arising in the Federal Republic of Germany shall be taxable in accordance with the German law, if:

  • (a) they are derived from rights or on account of profit participation, including income of a silent partner derived from his participation as a silent partner, from participatory loans, or as a result of obligations to pay profits as indicated in the German tax law, and if;
  • (b) in the calculation of the profits of the payee, the dividends or interest are deductible.

(7) With reference to Article 19:

Notwithstanding the provisions of paragraphs (1) and (2) of Article 19 shall apply to remunerations that are paid by or to the Goethe Institute or the German Academic Exchange Services (DAAD). Corresponding treatment of the remunerations of comparable institutions of the Contracting States may be arranged through mutual agreement of the competent authorities. Article 15 shall apply, if such remunerations are not taxable in the State, where the institution was founded.

(8) With reference to Article 26:

On the basis of this Convention, if the personal related data is disclosed, then the following supplemental provisions shall apply, after taking into consideration the applicable legal procedures of the domestic laws of the Contracting State:

  • (a) the data may only be used by the Receiving State for the specified purpose and in accordance with the terms specified by the Delegating State.
  • (b) when requested, the Receiving State shall inform the Delegating State on demand of the use of the data disclosed and of the results obtained from such use;
  • (c) personal data may be disclosed only at reliable places. Any further disclosure of the personal data to other places shall be done only with the previous permission of the competent authorities of the Delegating State.
  • (d) the Delegating State shall be under an obligation to ensure that the data to be disclosed is accurate as well as actually required and appropriate for the purpose to be accomplished through the disclosure. In this context, any regulations regarding non-disclosure that may be in effect, on the basis of domestic laws, must be respected. In case it is discovered that inaccurate data or data which was not supposed to be disclosed has been revealed, the Receiving State must be immediately notified thereof. The Receiving State shall be under obligation to correct or destroy such data without causing any further delay;
  • (e) At the request of the affected party, such person must be informed about his personal data being disclosed as well as the intended purpose of such disclosure. Such requirement shall not apply in case an assessment of the   specific situation determines that the public interest of not informing the affected party exceeds the right of the party to be informed of the disclosure of such personal data. In all other respects, the right of the affected party to   receive information on his personal data that are kept on file is subject to the domestic laws of the Contracting States in whose jurisdiction such disclosure is requested;
  • (f) in the event that a person is illegally injured as a result of disclosures within the scope of the exchange of data under the Convention, the Receiving State shall be liable towards such injured party pursuant to the provision of its domestic laws. With respect to the injured party, the Receiving State shall not deny liability by claiming that the damage was caused by the Delegating State;
  • (g) to the extent that the domestic laws, applicable to the Delegating State contains special rules regarding solutions with respect to the shares and personal data disclosed, this State shall notify the Receiving State thereof. Regardless of this right, any personal data provided must be deleted as soon as it is no longer required for the purpose for which it was provided;
  • (h) the Delegating and the Receiving State shall be are obligated to take on record the disclosure and receipt of the personal data;
  • (i) the Delegating and the Receiving State shall be obligated to effectively protect the disclosed personal data against unauthorized access, unauthorized alteration, and unauthorized disclosure.

DONE at Berlin, on August 25, 2004, in duplicate copies, in German, Azerbaijani, and Russian, both texts being equally authentic. Where there is a differing interpretation between the German text and the Azerbaijani text, the Russian text shall prevail.