"The purpose of the agreement is to strengthen and expand the economic cooperation between Kazakhstan and Macedonia by creating favorable conditions for mutual investment. The agreement eliminates the double taxation of income of residents of both States, prevents the tax evasion and will also help to increase the trade turnover and investment between the contracting States", the Committee on Foreign Affairs, Defence and Security reported.
In particular, the Agreement contains the provisions under which the dividends, interest and royalties may be taxed in the State of occurrence of the source of income at reduced rates.
According to Article 5 of the Agreement, a legal entity resident of a Contracting State may be exempted from the income tax in the other Contracting State if he carries on the business without a creation of permanent establishment.
"If a resident of a Contracting State derives income which in accordance with the provisions of this Agreement may be taxed in the other Contracting State, the first-mentioned Contracting State shall allow a deduction from the tax on the income of a resident of the amount equal to the income tax paid in that other Contracting State", the message reads.