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Taxes

Taxes  

  • International treaties on elimination of the double taxation is signed by the Azerbaijan Republic with the countries: Austria, Belarus, Belgium, Bulgaria, China, Czech Republic, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Islamic Republic of Iran, Islamic Republic of Pakistan, Italy, Japan, Canada, Kazakhstan, Korea, Kuwait, Latvia, Lithuania, Luxemburg, Moldova, Nederland, Norway, Poland, Qatar, Romania, Russian Federation, Serbia, Switzerland, Tajikistan, The Hashemite Kingdom of Jordan, Turkey, Ukraine, United Arab Emirates, United Kingdom, Uzbekistan
  • The monthly income shall be taxed at following rates:

Amount of monthly taxable income

Amount of tax

Up to 2000 manats

14 percent

Over 2000 manats

280 Manats + 30% of the amount exceeding 2000 manats

Income tax from the incomes of natural persons, working under contracts in two or more places, shall be calculated separately from the amount paid by each employer, and paid to the state budget.

  • The annual income on non-entrepreneurial activity shall be taxed at following rates:

Amount of taxable annual income

Tax amount

Up to 24000 manats

14 percent

Over 24000 Manats

3360 Manats + 30% of the amount exceeding 24000 manats

101.3. From the physical persons carrying out entrepreneurial activity without creating a legal entity, tax is withheld  at the rate of 20 percent of the taxable profits.

  • State taxes:

The following are state taxes:

  • tax on the income of natural persons;
  • tax on the profit of legal persons (with the exception of entities and enterprises that are the property of municipalities);
  • value added tax;
  • excise tax;
  • property tax levied from legal persons;
  • land use tax levied from legal persons;
  • road fund taxes;
  • mineral royalty tax;
  • simplified tax.

This code establishes maximum rates for all state taxes.
State tax rates introduced on yearly basis shall not exceed the rates established by this Code and those shall be reconsidered annually during the approval of state budget legislation of the Azerbaijan Republic.

  • Exemptions and privileges

106.1. The following shall be exempt from tax:
106.1.1. income of charitable organizations - except for the income from entrepreneurial activity
106.1.2. grants, membership fees and donations received by non-commercial organizations;
106.1.3. income of international, interstate and intergovernmental organizations - except for the income received from the entrepreneurial activity;
106.1.4. income of state power authorities, budget-funded organizations and local managing authorities (except for the income from entrepreneurial activity);
106.1.5. income of the Central Bank of the Republic of Azerbaijan, its structures and State Oil Fund of the Azerbaijan Republic (with exception of profits made from allocation of its funds), as well as the Fund of Deposit Insurance;
106.1.6. received insurance payments (with exception of amounts of losses connected with each insurance case).
106.1.7. Income of special educational institutions, established for education of persons with poor health - except for income, gained as a result of business activity.
106.1.8. Income from writing-off tax debts to the state budget in accordance with legislation of the Azerbaijan Republic
106.2. Income tax rate for production enterprises owned by public organizations of disabled people, or children with limited levels of health shall be reduced by 50 percent if not less than 50 percent of employees at such enterprises are disabled people, or persons under age of 18 with limited levels of health.
When establishing the right for the privilege the average number in the list of employees shall not include disabled people or persons under age of 18 with limited levels of health who work on contract terms at two jobs, as contractors and other agreements civil legislation.

  • What documents are required to register representative offices or branches of foreign commercial persons?

To register representative offices or branches of foreign commercial banks, Application for State Registration of Commercial Legal Person shall be submitted to a related tax body. The application is signed by the founder or the properly authorized representative and notary-certified. The following are attached to the application:
- the Statement approved by the foreign legal person establishing the representative office or branch or by the authorized agent (2 copies);
- the original or notary-certified copy of the foreign legal person's resolution to establish the representative office or branch and appoint its chief or legal agent; if passport details of the agent or chief are not confirmed by the Ministry of Internal Affairs' database related, attaching ID-copies to the application may be required;
- the notary-certified copy of documents to confirm the foreign registration of the legal person establishing the representative office or branch: a certificate of registration (registry extract) or Charter. In this case, the document should be properly legalized by the Republic of Azerbaijan's diplomatic mission to the legal person's country or by another foreign mission representing the Republic of Azerbaijan in that country (if not available, by the Consulate Office of the Republic of Azerbaijan's Ministry for Foreign Affairs as an exceptional case);
- the document to confirm the representative office's or branch's legal address;
- in case of the special tax regime for the representative office or branch, the related information shall be provided with the according addendum to Application for State Registration of Commercial Legal Person;
- document on payment of the state fee;
- if signed by the founder's (founders') proper agent, the letter of attorney is provided with the application.
It is prohibited to require other documents not stipulated by the legislation.
To establish representative offices or branches of foreign banks, insurance companies, higher and secondary schools, the document to certify initial agreement by a related body on respective actions is required. n.

  • What documents are required to register foreign-invested commercial legal persons?  

To register foreign-invested commercial legal persons, Application for State Registration of Commercial Legal Person shall be submitted to a related tax body. The application shall be signed by the founder(s) or the properly authorized representative and notary-certified. The following are attached to the application: - Charter approved by the founder(s) of the entity to become a legal person or by the authorized agent (2 copies);
- the founder's (founders') resolution signed to establish the entity to become a legal person and approve Charter;
- Addendum to Application for State Registration of Commercial Legal Persons on the founders' details; If established by natural and legal persons, two forms shall be filled in separately. If passport details of the natural-person founder are not confirmed by the related database of the Ministry of Internal Affairs, attachment of ID-copies to the application may be required;
- if the founder is a foreign legal person, the notary-certified copy of documents confirming foreign registration of this legal person: a certificate of registration (registry extract) or Charter. In this case, the document should be properly legalized by the Republic of Azerbaijan's diplomatic mission to the legal person's country or by another foreign mission representing the Republic of Azerbaijan in that country (if not available, by the Consulate Office of the Republic of Azerbaijan's Ministry of Foreign Affairs as an exceptional case);
-if the founder is a foreign or stateless person, a properly legalized document confirming his/her economic activity in any country; - if the supervisory board has been elected by the date of submission of the application on state registration to a tax body, data on its members are provided with a respective addendum of Application on State Registration of Commercial Legal Persons. If the members' passport details are not confirmed by the Ministry of Internal Affairs' related database, it may be required to attach ID-copies to the application;
a copy of the resolution by the founders on the appointment of a legal representative or a chief, authorized as executive and administrative powers (if the representative's passport details are not confirmed by the Ministry of Internal Affairs' related database, it may be required to attach ID-copies to the application);
- the document confirming the address of the entity to be a legal person; - a document confirming payment of the charter capital in case of establishing a limited liability company, joint-stock company, bank or an insurance company (bank receipt, real-estate mortgage, etc.); - if an entity becoming a legal person is going to act under the special tax regime, the related data are provided with a respective addendum to Application on State Registration of Commercial Legal Persons;
- document on payment of the state fee; - if signed by the founder's (founders') appropriate agent, the letter of attorney is provided with the application
It is prohibited to require other documents not stipulated by the legislation.

Ministry of Taxes of the Republic of Azerbaijan
Address: 16, str., Landau Baku, AZ1073
Tel: (+994 12) 403-89-70
Fax: (+994 12) 403-89-71
E-mail: office@taxes.gov.az
Web: http://www.taxes.gov.az/eng/