A number of significant amendments have been made to the Tax Code of the Republic of Azerbaijan and customs legislation. The innovation in the field of e-commerce is that if a non-resident’s income derived from e-commerce exceeds the manat equivalent of 10,000 US dollars, they must register for tax purposes electronically within 30 days from that date.
Amendments to the Tax Code and the Law “On Customs Tariff” of Azerbaijan
A number of significant amendments have been made to the Tax Code of the Republic of Azerbaijan and the Law “On Customs Tariff”. The amendments shall enter into force on 1 January 2026, while certain provisions shall be implemented gradually until 23 August 2026. The amendments mainly cover provisions related to taxpayer registration procedures, exemptions from income (profit) tax, value added tax (VAT), excise tax and customs duties.
The procedures for tax registration of non-residents engaged in electronic commerce have been updated. Previously, non-residents were subject to registration in respect of works and services rendered to residents. However, under the new rules, this concept has been clarified and extended to works and services rendered to persons not registered with the tax authorities.
In addition, both mandatory and voluntary registration mechanisms shall apply to such non-residents. If, during a calendar year, the income derived by a non-resident from works and services provided through electronic commerce to buyers who are located in Azerbaijan exceeds the equivalent of USD 10,000 in manats, such non-resident shall be required to register electronically with the tax authority within 30 days from the date this threshold is exceeded. Non-residents whose turnover does not exceed this threshold may register voluntarily.
Non-residents registered for tax purposes under this procedure shall be obligated to remit VAT to the state budget for each reporting period no later than the last day of the month following the reporting period.
At the same time, the scope of services deemed to be provided through electronic commerce has been clarified. According to the amendments, the following services shall not be considered works (services) provided through electronic commerce:
Pursuant to the addition made to Article 34.8.3 of the Tax Code, when state bodies (institutions), legal entities owned by the state or in which the controlling stake is held by the state, as well as public legal entities established on behalf of the state, are registered for tax purposes, reorganized or deregistered, information thereon (including their name, TIN and bank accounts) shall be compiled at the end of each month and submitted electronically by the State Tax Service to the Ministry of Finance of the Republic of Azerbaijan by the 15th day of the following month.
Furthermore, in accordance with newly added Article 35.2-1 of the Tax Code, when the above-mentioned entities are registered as taxpayers, information on their bank accounts shall be transmitted electronically to the Ministry of Finance of the Republic of Azerbaijan within one business day following the date such information is received by the tax authority.
According to the amendments, certain income has been exempted from income and profit tax in connection with the holding of the Thirteenth Session of the World Urban Forum (WUF13) of the United Nations in Azerbaijan.
Accordingly, income derived by non-resident individuals engaged in the supply of goods, performance of works and provision of services within the framework of the Forum shall be exempt from income tax for a period of one year commencing from 1 September 2025.
Additionally, royalty income paid to non-residents in connection with the Forum, as well as income derived by non-resident legal entities from works and services, shall be exempt from profit tax for a period of one year from 1 September 2025.
Under the VAT-related amendments, the importation of rare (vintage) motor vehicles shall be exempt from VAT, limited to 1 unit per person per calendar year and not exceeding 10 units in total across the country.
Furthermore, in connection with WUF13, works and services performed by non-residents under a contract concluded with the State Committee for Urban Planning and Architecture, as well as the importation of goods based on a supporting document issued by that Committee, shall be exempt from VAT for a period of one year from 1 September 2025.
According to the latest amendments, the importation of works of art, collectors’ items and antiques—determined by the Cabinet of Ministers according to the commodity nomenclature codes of foreign economic activity—shall also be exempt from VAT on the basis of a supporting document issued by the Ministry of Culture of the Republic of Azerbaijan.
Finally, based on a supporting document issued by the Ministry of Culture of the Republic of Azerbaijan, the importation of 1 rare (vintage) motor vehicle per person per calendar year (not exceeding 10 units in total across the country) shall be exempt from excise tax and pursuant to the amendments to the Law “On Customs Tariff”, from customs duty.
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