A permanent establishment (PE) of a foreign legal entity is subject to taxation in Azerbaijan with respect to the income attributable to such PE. A PE is defined as the following:

Persons who are performing the function of a permanent establishment of a non-resident legal entity or natural person and who are authorized to conclude contracts on behalf of such non-resident entity or natural person
A bureau, office or agency
A location where activities are carried out relating to the development of natural resources
The rendering of consultancy services
A fixed base used for entrepreneurial activities for a cumulative amount of 90 days during any 12-month period

However, the following places are not considered as PE of a foreign entity in Azerbaijan:

Using of facilities for the storage or demonstration of goods belonging to the non-resident enterprise;
Using facilities for storing goods or products belonging to the non-resident enterprise for the sole purpose of being processed and exported by another enterprise;
Using of facilities for the purpose of purchasing of goods or manufacturing of products by the non-resident enterprise for its own needs;
Using of facilities for the carrying out of activities of preparatory or auxiliary character;
Using of facilities for the combined exercise of the activities listed above.

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