Azerbaijani Entrepreneurs Working with Foreign Companies: If You Don’t Submit DTA Forms, You’re Already Losing

Today, many Azerbaijani companies in logistics, IT, manufacturing, and other industries work with international partners. However, in most cases, tax benefits are not used properly. The main reason? Failure to submit DTA (Double Taxation Avoidance) forms.

If this simple form is not submitted, your company immediately starts losing:

• Financial loss

• Tax risks

• Penalty threats

• Unprofessional reputation

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What is a DTA Form?

DTA (Double Taxation Avoidance) is an international tax treaty that prevents the same income from being taxed twice in two countries.

Azerbaijan currently has such agreements with over 50 countries.

These agreements allow you to be exempt from or pay minimal tax when working with foreign companies. But to use these benefits, DTA forms must be correctly filled out and submitted.

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What Happens If You Don’t Submit a DTA Form?

• 10% tax is withheld in Azerbaijan—even if the treaty says it should be 0%.

• 10–15% is withheld by the foreign partner—because you didn’t provide a residency certificate.

• Increased risk of tax audits and penalties

• You appear unreliable, damaging future cooperation.

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Didn’t Submit on Time? You Can Still Get Your Money Back

If DTA-03 was not submitted on time and tax was overpaid, it’s possible to recover it—

But only within 3 years, and with full documentation.

You must then:

• Submit DTA-05 – to reclaim or offset the overpaid tax.

• Prepare the following documents:

  • DTA-03 (submitted retroactively)

  • Foreign company’s residency certificate

  • Contract, payment records, and supporting documents

After 3 years, you lose the right to claim.

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Most Common DTA Form Types

Form	Purpose
DTA-01	To avoid tax when receiving payments from abroad
DTA-02	To deduct tax already paid abroad from Azerbaijani tax
DTA-03	To prevent tax when making payments abroad
DTA-05	To reclaim mistakenly paid taxes
DTA-06	Cover letter to tax authorities for DTA forms

 

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Real Case Examples

Example 1 – Logistics Company
“BakuCargo” made a 100,000 AZN payment to a Romanian partner. No DTA-03 form submitted → 10,000 AZN tax withheld.
Two years later, they submitted DTA-03 and DTA-05 → tax was refunded.

Example 2 – IT License
An Azerbaijani logistics company purchases software from Germany for 30,000 AZN per year.
Without DTA-03 → 3,000 AZN tax withheld.
With DTA-03 → 0% tax.

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How Ideovate Consulting Helps:

• Full preparation and submission of all DTA forms (01, 02, 03, 05, 06)

• Review and refund of past overpaid taxes

• Contract review to ensure proper tax treatment

• Professional correspondence with tax authorities

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Remember: Not submitting DTA = saying no to your own profits

If you don’t submit these forms:

• You pay more tax than required

• Foreign partners think you’re unprofessional

• Tax authorities decide for you

That money is yours — reclaim it!

???? Work with Ideovate Consulting – Protect your profits. Professionally and securely.