The France-Azerbaijan tax treaty: a single rate of 10% on dividends, the MLI since 2025

The France-Azerbaijan convention sets a single ceiling for dividends: 10 % of the gross amount, without a holding threshold or duration condition in article 10 § 2. It was signed in Paris on December 20, 2001, entered into force on October 1, 2005 and the MLI has been in effect there since 2025.

A text from 2001, a recent MLI

The convention has been applicable since January 1, 2006 (Article 30). The administrative list (BOI-ANNX-000306, dated April 29, 2026) classifies it among those concerning income and wealth, without mentioning any inheritance law. The MLI (Multilateral Income Tax Agreement) takes effect in France on January 1, 2025, for taxes withheld at source and on July 1, 2025, for other taxes. It adds the principle of principal purpose: a benefit is denied if obtaining it was one of the principal purposes of an arrangement.

Azerbaijan: Maximum Detentions and Key Rules

Dividends of €60,000: a numerical example (fictitious profile)

Situation. A fictitious resident partner from Azerbaijan receives €60,000 in gross dividends from a French company.

Issue. He wants the maximum that France can retain and wonders if his participation rate matters.

Strategy. He applies the ceiling of Article 10 § 2, which does not mention any holding conditions, and has the clause of the main purpose checked.

Result. The ceiling is €6,000 (10 %s of €60,000), leaving a balance of €54,000 before any other tax. For €25,000 in royalties, it would be €1,250 at 5 %s and €2,500 at 10 %s. These are maximums, not the tax due.

Two thresholds of 183 days

Article 15, paragraph 2, applies to salaried employees: stays not exceeding a total of 183 days in any twelve-month period. Article 14 applies to self-employed individuals: in addition to the usual fixed allowance (paragraph 1), paragraph 3 applies to stays in Azerbaijan exceeding 183 days in any twelve-month period. We do not reproduce the full conditions of Article 14.

Residences and legal entities

Article 4, paragraph 2, defines the following criteria for a natural person: permanent home, center of vital interests, habitual residence, nationality, and then agreement. For a legal entity resident in both States, the competent authorities endeavor to resolve the matter by mutual agreement; failing that, the consolidated text states that the person is not considered a resident.

Pensions, double taxation

Article 18 restricts private pensions to the state of residence; Article 19, paragraph 2(a), addresses pensions paid by a state. On the French side, Article 23, paragraph 1(a), grants a tax credit against French tax, and Azerbaijani tax is not deductible from this income. Termination is possible after five calendar years, with at least six months' notice (Article 31).

What this sheet does not cover

The convention does not contain any articles on inheritance or donations. Azerbaijani taxation itself, the IFI (French wealth tax), the protocol on technical services, and the fate of the old 1985 convention are not addressed.

What changes depending on your situation

• Your residence, and that of the company, as defined in the agreement.
• The nature of the income: dividend, interest, royalty, gain, salary.
• Your status: employee or self-employed, because the 183-day threshold is not read in the same way.
• The number of days in each state.

An article should be read in light of the facts in your case, and no result is guaranteed in advance.