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Must a separate DTA-03 application be submitted for each new invoice?
We kindly request clarification on several issues regarding the application of international agreements for the avoidance of double taxation (DTA-03). Under a contract concluded with a non-resident airline, weekly payments are made for issued airline tickets. The contract remains valid until the end of the current year. A DTA-03 application was submitted based on the first proforma invoice, and a positive decision was obtained. The DTA-03 decision specifies the validity period of the contract and the amount stated in the proforma invoice submitted with the application. In this regard, we kindly request clarification on the following:
Does the DTA-03 approval obtained apply to subsequent weekly payments made under the same contract? Or is a separate DTA-03 application required for each new invoice (payment)?
If a separate DTA-03 application is required for each new invoice, is it possible to submit a DTA-03 application based on a proforma invoice indicating the estimated total amount of payments expected to be made under the contract during the year, even if the exact amount is not known in advance?
If the amount stated in the final invoice and the service acceptance certificate later differs from the amount indicated in the proforma invoice, would this have any impact on the applicability of the DTA-03 approval?
In response to the first question, the State Tax Service under the Ministry of Economy of the Republic of Azerbaijan stated that, based on the DTA-03 application, an approval letter is issued to the income payer and the relevant non-resident for the amount of income specified in the application and the period during which the payments are made (or will be made). If the amount and payment period approved in the previously issued DTA-03 approval letter cover only the amounts (invoices) and payment period specified in that application, a new application must be submitted for any additional amount (invoices) and any additional payment period.
Regarding the second question, it was explained that, provided a tax residency certificate of the non-resident is available, a DTA-03 application may be submitted based on an estimated amount, indicating the payment period until the end of the current or the following year (subject to paragraph 8.6 of the Rules).
In response to the third question, it was stated that if the amount and payment period approved in the previously issued DTA-03 approval letter cover only the amounts (invoices) and payment period specified in that application, a new DTA-03 application must be submitted for any additional amount (invoices) and any additional payment period.
We kindly request clarification on several issues regarding the application of international agreements for the avoidance of double taxation (DTA-03). Under a contract concluded with a non-resident airline, weekly payments are made for issued airline tickets. The contract remains valid until the end of the current year. A DTA-03 application was submitted based on the first proforma invoice, and a positive decision was obtained. The DTA-03 decision specifies the validity period of the contract and the amount stated in the proforma invoice submitted with the application. In this regard, we kindly request clarification on the following:
Does the DTA-03 approval obtained apply to subsequent weekly payments made under the same contract? Or is a separate DTA-03 application required for each new invoice (payment)?
If a separate DTA-03 application is required for each new invoice, is it possible to submit a DTA-03 application based on a proforma invoice indicating the estimated total amount of payments expected to be made under the contract during the year, even if the exact amount is not known in advance?
If the amount stated in the final invoice and the service acceptance certificate later differs from the amount indicated in the proforma invoice, would this have any impact on the applicability of the DTA-03 approval?
In response to the first question, the State Tax Service under the Ministry of Economy of the Republic of Azerbaijan stated that, based on the DTA-03 application, an approval letter is issued to the income payer and the relevant non-resident for the amount of income specified in the application and the period during which the payments are made (or will be made). If the amount and payment period approved in the previously issued DTA-03 approval letter cover only the amounts (invoices) and payment period specified in that application, a new application must be submitted for any additional amount (invoices) and any additional payment period.
Regarding the second question, it was explained that, provided a tax residency certificate of the non-resident is available, a DTA-03 application may be submitted based on an estimated amount, indicating the payment period until the end of the current or the following year (subject to paragraph 8.6 of the Rules).
In response to the third question, it was stated that if the amount and payment period approved in the previously issued DTA-03 approval letter cover only the amounts (invoices) and payment period specified in that application, a new DTA-03 application must be submitted for any additional amount (invoices) and any additional payment period.