Agreement On approval of the Agreement On the principles of withholding of direct taxes upon import and export of goods (work, services) between the Government of the Azerbaijan Republic and the Government of Georgia

Agreement
On approval of the Agreement On the principles of withholding of direct taxes upon import and export of goods (work, services) between the Government of the Azerbaijan Republic and the Government of Georgia

The Government of the Azerbaijan Republic and the Government of Georgia, hereinafter referred to as the Parties,

With the objectives of further enlargement of trade-economic relations, establishment of equal opportunities for economic entities and provision of fair competition and

based on the norms and procedures of the international trade, agreed as follows:

Article 1. General

For the objectives of this Agreement:

a) direct taxes will mean value added tax and excises (excise and duties);

b) zero rate will mean imposition of value added tax with 0 rate, this will be equal to complete exemption from value added tax;

c) the principle of place of assignment will mean imposition of 0 rate upon export of goods (work, services) from the customs territory of the Party and taxation of the goods (work, services) imported according to the rates established by the internal legislation;

d) competent authorities will mean the Ministry of Finance of the Azerbaijan Republic and Chief Tax Inspectorate of the Azerbaijan Republic from the Azerbaijan side and the Ministry of Finance of the Republic of Georgia from the Georgian side.

Article 2. Principles of taxation upon export

The Parties will not impose a tax on the goods (work, services) exported from the territory of one Party to the territory of another Party.

Article 3. Principles of taxation upon import

1. Goods (work, services) exported from the territory of one of the Parties to the territory of another Party might be subject to direct taxes in the importer State in accordance with its internal legislation. Taxation will be carried out by the customs bodies upon the entry of goods to the customs territory of this Party.

2. Value added tax on imported goods (work, services) will be withheld from the customs value of the goods imported.

3. Upon taxation of goods (work, services) exported from the territory of one of the Parties and imported to the territory of other Party the Parties will apply tax rates and estimation procedures established for analogous goods (work, services) produced (sold) within the internal markets.

Article 4. Settlement of disputes

All disputes and disagreements arising between the Parties in view of application and interpretation of provisions of this Agreement will be settled through consultation and negotiations of the Parties.

Article 5. Exchange of information

The Parties, in relation to the taxes falling under the sphere of effect of this Agreement, will exchange with information on changes and additions introduced to their internal legislation.

Article 6. Final provisions

1. This Agreement will come into effect from the date of final written notification confirming fulfillment of corresponding interstate procedures of the Parties necessary for its coming into force.

2. This Agreement will only be applied against goods (work, services) delivered after its coming into force.

3. This Agreement will be terminated after completion of six months period upon receipt of written notification by of one of the Parties on the intention of the other Party on termination of the present Agreement.

Executed in the city of Tbilisi on December 27, 1997 in two copies each in Azerbaijani, Georgian and Russian, all copies having equal force.

Russian text will be used for interpretation of the provisions of this Agreement.

On behalf of the Government
of the Azerbaijan Republic

On behalf of the Government
of Georgia

The Agreement was approved by the Law #447-IG of the Azerbaijan Republic dated February 20, 1998 (AzerSoft).