The agreement between the Government of the Republic of Kazakhstan and the Government of the Azerbaijan Republic on the principles of collection of indirect taxes during the exporting and commodity import (works, services)

of June 10, 1997

The government of the Republic of Kazakhstan and the Government of the Azerbaijan Republic the hereinafter referred to as Contracting Parties, aiming at development of the mutually beneficial economic relations and deepening of economic integration, establishment of equal opportunities for business entities and to creation of conditions for fair competition, being guided by the commonly accepted regulations and rules of international trade, agreed as follows:

Article 1 General determinations

For the purpose of this agreement:

a) the term "indirect taxes" means the value added tax and the excise tax;

b) the term "zero rate" means taxation on value added at the rate of 0% that is equivalent to full relief from the value added tax;

c) the term "principle of the destination" means application of zero rate when exporting from customs area of one Contracting Party and taxation imported (or imported) goods (works, services) at the rate established by the domestic legislation of this Party;

d) the term "one Contracting Party" and "other Contracting Party" means the Republic of Kazakhstan and the Azerbaijan Republic depending on context;

e) the term means "competent authorities" from the Kazakhstan side - the Ministry of Finance of the Republic of Kazakhstan, from the Azerbaijani side - the Ministry of Finance of the Azerbaijan Republic and the Main State Tax Authorities of the Azerbaijan Republic.

The article 2 Principle of Collection of Taxes when exporting

Contracting parties will not assess with indirect taxes the goods (works, services) exported by one Contracting Party to other Contracting Party.

The article 3 Principle of Collection of Taxes when importing

The goods imported on the territory of one Contracting Party (work, service) exported from the territory of other Contracting Party are assessed with indirect taxes in the importing country according to its national legal system.

Taxation is performed by customs authorities in case of commodity importation on customs area of the Contracting Party.

In case of taxation of imported goods (works, services) Contracting Parties will not apply the tax rates the exceeding corresponding taxes on similar goods (works, services) internal production.

Article 4 Solution of Matters of Argument

Contracting parties within the legislation will take the coordinated actions directed to creation of identical system of indirect taxation, concerning, in particular, the tax matters in case of trade with the third countries and also on inclusion of the principles specified in this agreement in the domestic tax legislation.

Competent authorities will develop specific mode of operation of this Item, taking into account provisions of earlier reached agreements in the field of cooperation and mutual aid concerning observance of the tax legislation.

All disputes and disagreements on interpretation and application of provisions of this agreement will be solved by consultations and negotiations between Contracting Parties.

Article 5 Final provision

This agreement becomes effective from the date of the notification Contracting Parties about accomplishment of all necessary interstate procedures.

This agreement will be applied only to goods (works, services) provided after its entry into force.

Each Contracting Party can leave this agreement, having sent the written notice to other Contracting Party not later than six months to exit, having settled the financial and other liabilities which arose during operation of the Agreement.

It is made in the city of Almaty on June 10, 1997 in two authentic Copies everyone on Kazakh, Azerbaijani and Russian to languages.

In case of disagreements between Contracting Parties in the text of this agreement in the Kazakh and Azerbaijani languages, the text in Russian is assumed as a basis.

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