Azerbaijan / United Kingdom · Proposed legislation
Azerbaijan and UK advance talks on replacement tax treaty
On 3 November 2026, Azerbaijan's State Tax Service announced that Azerbaijani and UK tax officials had held a further round of negotiations on a new convention covering taxes on income and capital gains and the prevention of tax evasion.
- Official document:
- Proposed Azerbaijan–UK convention on income and capital gains
- Development date:
- 2026-11-03
Negotiating milestone, not an agreed text
Officials exchanged views on various provisions of the draft convention, but the State Tax Service did not say that the text had been finalised or identify any agreed withholding-tax rates, permanent-establishment thresholds or other allocation rules. Those details remain open until an authoritative treaty text is released.[1]
Unresolved points carried forward
The talks follow a first round held in London in June. After that meeting, Azerbaijan's tax authority said agreement had been reached on most taxation provisions, while positions had been brought closer on some other provisions and unresolved matters were left for the next round. The June account also identified information exchange and assistance in collecting tax debts as objectives. The November release confirms that negotiations continued, but does not say that remaining points were resolved.[1][2]
Existing convention remains operative
For now, the 1994 Azerbaijan–UK Double Taxation Convention remains the operative bilateral agreement. HM Revenue & Customs records that it entered into force on 3 October 1995 and has applied in Azerbaijan since 1 January 1996. It also records that the Multilateral Instrument's modifications became effective for withholding taxes from 1 January 2025, UK Corporation Tax from 1 April 2026, UK Income Tax and Capital Gains Tax from 6 April 2026, and other Azerbaijani taxes from 1 July 2025.[3]
No current rate or entitlement change
Groups with payments, financing, licensing arrangements or permanent-establishment exposure between the countries should continue applying the existing convention and its effective MLI modifications. The negotiations do not support changing a withholding rate, filing position or treaty-entitlement analysis. Tax teams can map current cross-border income streams and monitor for signature, publication of the new text, domestic ratification and entry-into-force notices.[1][3]
Commencement remains unknown
A replacement treaty will not affect a payment merely because negotiations have advanced. Its commencement and tax-specific application dates remain unknown and should be taken only from the final treaty and subsequent official notifications.[1]
Official sources
- [1] Negotiations continue on a new convention to eliminate double taxation
Azerbaijan State Tax Service · Document date: 2026-11-03
Entire official announcement, especially paragraphs 1-3 and the 3 November 2026 timestamp: further negotiations on the draft income and capital-gains convention.
- [2] First stage of negotiations on a new convention to eliminate double taxation
Azerbaijan State Tax Service · Document date: 2026-06-10
Paragraphs 1-4: first-round scope, agreement on most taxation provisions, unresolved matters carried forward, and information-exchange and tax-debt-collection objectives.
- [3] Azerbaijan: tax treaties
HM Revenue & Customs · Document date: 2026-02-09
Current 1994 convention, entry into force and application dates, plus Multilateral Instrument effective dates for withholding, UK taxes and Azerbaijani taxes.