News

The Law of the Republic of Azerbaijan on Amendments to the Tax Code in connection with the introduction of a temporary tax regime due to significant changes in economic conditions as a result of the spread of the coronavirus pandemic (COVID-19) was approved by the Milli Majlis, on June 2, 2020.

We present the summary of these changes.

- The temporary tax regime applies to persons engaged in the following activities:

• tour operator and travel agency.
• catering activities.
• domestic (intercity and inter-district, intra-city and intra-district) passenger transportation by road (including taxis);
• the activity of hotel and other hotel-type facilities;
• transportation and (or) delivery of goods on orders, including meals, food, and non-food products from sellers to buyers;
• organization of exhibitions, scene, recreation and entertainment (game), the activity of cinema, theater, museum and concert halls;
• various other areas (for example, the activities of sports and health facilities, training and professional development courses, etc.)s.

 - Deadlines for submission of reports and payment of taxes are defined as follows:

• The assessed tax on profit (income) and the property tax for 2019 must be paid no later than September 1 of the current year;
• Micro-business entities submit a simplified, current, and property tax return for the first and second quarters of 2020 to the tax authority by September 1 of the current year and pay the assessed tax no later than September 1 of the current year.

 - The following exemptions and reductions are applied to the persons subject to the temporary tax regime:

• property and land taxes - 100% discount;
• profit (income) tax - 75% discount (i.e., profit (income) tax - effective rate at 5%);
• simplified tax for persons engaged in domestic (intercity and inter-district, intra-city and intra-district) passenger transportation by motor vehicles (including taxies) - 50% discount;
• simplified tax from persons engaged in catering activities - - 50% discount (4% tax will be levied instead of 8%);
• 50% discount on real estate leased from individuals - 50% discount (7% instead of 14%).

 - Calculation of interest from 1 April 2020 to 1 January 2021 is suspended.

 - These changes will be valid for one year from January 1, 2020.