The Tax Code of the Republic of Azerbaijan
(Approved by the Law No.905-IG of the Azerbaijan Republic from 11 July, 2000)
General Part
Chapter 1. General Provisions
Article 1. Relations Regulated by the Tax Code of Azerbaijan Republic
1.1. This Code shall establish the tax system of the Republic of Azerbaijan,
general principles of taxation in the Azerbaijan Republic, rules for determining,
payment and collection of taxes, the rights and responsibilities of taxpayers and
State tax authorities, as well as other parties to taxation procedures, tax control
forms and methods, liability for tax law violations and the procedures for lodging
complaints against unlawful actions (failure to take actions) committed by tax
agencies and officials thereof.
1.2. This Code establishes the general principles of taxation and taxes for
Nakhichevan Autonomy Republic and municipalities.
Definitions and rules determined in this Code shall be established for the purposes
of tax payment and used only within the scope of taxation and tax control
regulated by this Code and other legislative acts established on its basis.
Article 2. Tax Legislation of Azerbaijan Republic 2.1. The Constitution of Azerbaijan Republic, this Code, and those legal standards
adopted in compliance herewith, shall comprise the tax legislation of Azerbaijan
Republic.
2.2. Any article of law adopted on the basis of this Code or for the purposes of its
execution shall not contradict with the provisions of this Code.
2.3. Should tax legislation contradict any legi slation in other areas, with the
exception of provision stipulated by Article 2.7. of this Code, the provisions of tax
legislation shall apply.
2.4. Taxation and tax control issues can not be included into the legislative acts,
other than tax legislation, with the following exceptions:
2.4.1. provisions concerning administrative offences in relation to tax
issues, stipulated by the Code of the Azerbaijan Republic for
Administrative Offences ;

2.4.2. provisions concerning tax crimes included in the Criminal Code of
the Azerbaijan Republic;
2.4.3. provisions concerning the priority of tax obligations included in the
legislation on bankruptcy and insolvency;
2.4.4. provisions on taxes contained in budget legislation;
2.4.5. provisions governing state maintenance allocation and guarantees
on taxes;
2.4.6. provisions stipulated by agreements or laws on production sharing,
main pipeline and other similar agreements and laws;
2.4.7. provisions stipulated by the legislation on oil and gas operations of
export directio n and special economic areas.
2.5. Should any international treaty to which the Republic of Azerbaijan is a party
provide for regulations that differ from those contained in this Code and
legislative acts established on taxes, the provisions of said international treaties
shall govern.
2.6. If international treaty with the intention of avoiding double taxation to which
Azerbaijan Republic is the party applied by any person, who is not the resident of
the state that entered into such treaty for the purpose o f obtaining tax privileges,
provisions of article 2.5. of this Code shall not be applied for the purposes of tax
privileges to the resident of the state that is the party to such treaty.
2.7. If production sharing or main pipeline agreements approved by the legislation
before this Code is entered into force or after its enforcement, as well as other
laws and agreements of a similar nature, including the legislation on oil and gas,
contain provisions that differ from those stipulated by this Code and other
l egislative acts on taxes then provisions of such agreements and laws shall be
applied.
2.8. In the event of required changes to the Tax Code of the Azerbaijan in
connection with definition of tax policy, tax administration and tax rates within
the next yea r state budget draft, the drafts of these laws shall be submitted to the
respective executive authority no later than by May 1 of current year, and
respective executive authority further submits them to Milli Mejlis of the
Azerbaijan Republic.( 3, 21, 24
)
Article 3. Basis for establishment of taxes and their collection
3.1. Legislation on taxes is based on the universality, equality and fairness of
taxation

3.2. Taxes shall have an economic base.
3.3. It is not allowed to establish taxes that will li mit everybody’s
constitutional rights and freedom.
3.4. It is not allowed to establish taxes that will break the single economic system
of Azerbaijan Republic (in particular those that will directly or indirectly limit the
free movement on the territory of Azerbaijan Republic (of goods and services)
and monetary means, or otherwise limiting the legal activities of taxpayers).
3.5. Nobody can be forced to pay the tax of one nature from the profit (income)
for more than one time.
3.6. The taxes shall not be of discriminatory nature and shall not be established
based on the political, ideological, ethnic, confessional or other existing
differences between taxpayers.
It is prohibited to establish different tax rates based on the form of ownership,
citizenship of physical persons or origin of capital.
It is allowed to establish different rates of customs duties for commodities
imported into the territory of Azerbaijan Republic, dependant on
commodity’s country of origin in accordance with this Code and customs
legislation.
3.7. Taxes in the Azerbaijan Republic shall be established only by this Code;
changes or cancellations shall be implemented by making the changes in this
Code.
3.8. No person can be obliged to pay taxes, that have indications of taxes
establi shed by this Code but not established by it or taxes that were established in
the order different to that specified by this Code.
3.9. The tax legislation shall be formulated in the order that will allow everyone to
know what taxes, in which order, when and how much he shall pay.
3.10. The tax system shall stimulate the activities of entrepreneurs and investors.
3.11. All contradictions and obscurities and uncertainties in the tax legislation
shall be interpreted for taxpayer’s advantage.
3.12. Natural and legal persons shall have a free access to regulating legislative
acts on taxes.(6
)
Article 4. The tax system of Azerbaijan Republic

4.1. The taxes levied in the Republic of Azerbaijan pursuant to this Code shall be
as follows:
4.1.1. state taxes;
4.1.2. taxes of autonomy republic;
4.1.3. local (municipal) taxes.
4.2. State taxes are those taxes that are stipulated by this Code and are obligatory
for payment on the entire territory of Azerbaijan Republic.
4.3. The taxes of Autonomy Republic are those taxes that are stipulated by the
laws of Nakhichevan Autonomy Republic in accordance with this Code and
obligatory for payment in the Nakhichevan Autonomy Republic.
4.4. Local (municipal) taxes are those taxes stipulated by this Code and applicable
legislation, applied by the resolution of municipalities and obligatory for payment
on the t erritory of municipalities. Other obligatory payments applied by
municipalities shall be stipulated by the appropriate legislation.
Local (municipal) taxes rates shall be established within limits stipulated by tax
legislation. In accordance with tax legis lation municipalities shall be entitled to
make decisions on complete or partial tax release or decrease of tax levels for
certain categories of taxes paid by taxpayer in their areas.
4.5. In accordance with this Code special tax regime can be applied on t he
territory of Azerbaijan Republic.
The special tax regime stipulates the special procedure for tax calculation and
payment for the specified period of time.
4.6. It is not allowed to levy taxes that are not stipulated by this code.( 6
)
Article 5. Forms of taxation
5.0. Amounts of tax shall be collected in following forms:
5.0.1. directly from the source (tax collection before obtaining income or
profit);
5.0.2. by decla ration (tax collection after obtaining income or profit);
5.03. by notice (payment of the tax by taxpayer on the basis of payment
notice, issued for the sum, calculated by taxation authority or municipality
on the basis of cost of the taxation object and area). (3, 6
)

Article 6. State taxes
6.1. Following are state taxes:
6.1.1. tax on the income of physical persons;
6.1.2. tax on the profit of legal entities (with the exception of entities and
enterprises that are the property of municipalities);
6.1.3. value added tax;
6.1.4. excise tax;
6.1.5. property tax levied from legal persons;
6.1.6. land use tax levied from legal persons;
6.1.7. road fund taxes;
6.1.8. mineral royalty tax;
6.1.9. simplified tax.
6.2. This code establishes maximum rates for all state taxes.
6.3. State tax rates introduced on yearly basis shall not exceed the rat es
established by this Code and those shall be reconsidered annually during the
approval of state budget legislation of the Azerbaijan Republic. ( 6
)
Article 7. Taxes of Autonomy Republic
The taxes of autonomy republic are the state taxes levied in the Nakhichevan
Autonomy Republic, listed in article 6.1. of this Code (with the exception of Road
Fund Tax).( 14 )
Article 8. Local (municipal) taxes
8.1. Following are the local (municipal) taxes:
8.1.1. land use tax levied from natural persons;
8.1.2. property tax levied from natural persons;
8.1.3. mineral royalty tax on construction mater ials of local importance;

8.1.4. profit tax of enterprises and organizations that are the property of
municipalities.
8.2. Procedures for calculation and payment of local taxes, roles and
responsibilities of taxpayers and tax authorities of local municipal ities, pro-forma
and methods of tax control, liability for violation of tax legislation, complaint
procedures for actions or non- actions of municipal tax authorities and their
officers are determined under relevant legislation.( 6
)
Article 9. Tax calculation and payment currency
On the territory of Azerbaijan Republic taxes are calculated and paid in the
currency of Azerbaijan Republic- manats.
Article 10. Parties of rela tions regulated by tax legislation
10.0. Following are the parties of relations regulated by tax and levy legislation:
10.0.1. natural and legal persons recognized by this Code as taxpayers;
10.0.2. natural and legal persons recognized by this Code as tax agents;
10.0.3. state tax authorities of the Azerbaijan Republic;
10.0.4. customs authorities of the Azerbaijan Republic;
10.0.5. financial authorities of the Azerbaijan Republic, in the link with
solution of issues stipulated by this Code;
10.0.6. state power authorities, local self -management bodies, other
authorized bodies and officials, other than tax and customs authorities that
conduct the collection of financial means from taxpayers for the purposes
of tax collection and their bank transfers to the state budget in cases
stipulated by this Code.
Article 11. Definition of Tax Tax — a compulsory, individual and non- refundable payment made to the state
or local budget in the form of collection of monetary means from taxpayers with
the purpose of provi ding the financial basis to the state and municipal activities.
( 3
)
Article 12. Main terms of tax institution
12.1. The tax shall be considered as instituted only if ta xpayers are determined as
well as following elements of taxation:

12.1.1. subject of taxation;
12.1.2. basis for taxation;
12.1.3. tax period;
12.1.4. tax rate;
12.1.5. tax calculation procedure;
12.1.6. tax payment procedure and timing;
12.2. During tax i nstitution privileges can be established on basis stipulated by
this Code.
12.3. Subjects of taxation are: income, profit, property, land, minerals, value of
sold commodities (works, services) or other subjects of taxation stipulated by this
Code. ( 3
)
12.4. Taxation base – the quantitative expression of the part of subject of taxation
from which the tax is levied.
Article 13. Main definitions used in this Code
13.1. The definitions of civil, family and other areas of the legislation of
Azerbaijan Republic used in this Code shall be interpreted as determined in these
areas of legislation, unless otherwise stipulated by this Code.
13.2. Following definitions are applied for the purposes of this Code:
13.2.1. Person- any physical or legal person, permanent representation,
branch or other section of non- resident;
13.2.2. Legal person – enterprises and entities established with the status of
legal person in accordance with the le gislation of Azerbaijan Republic or
legislation of foreign state.
13.2.3. Natural person- citizen of Azerbaijan Republic, foreigner and
person without citizenship.
13.2.4. Taxpayer – any person who shall pay taxes from subjects of
taxation determined in acc ordance with this Code.
13.2.5. Resident:

13.2.5.1. the natural person to whom one of the following
requirements can be applied:
 who actually was on the territory of the Republic of
Azerbaijan for a total of more than 182 days during any 12 –
month period ending in a calendar year;
 was in the State service abroad for the Republic of
Azerbaijan during the calendar year or within one calendar
year;
 if natural person’s period of stay on the territory of
Azerbaijan Republic and foreign state (in any) does not
exceed the period of 182 days in accordance with indention
two and three of paragraph 13.2.5.1. of this Code then this
physical person shall be deemed as the resident of
Azerbaijan Republic based on criteria set in following
order:
 permanent place of res idence;
 place of vital interests;
 place of normal residence;
 citizenship of the Azerbaijan Republic.
13.2.5.2. The natural person shall be recognized as non- resident of
the Azerbaijan Republic from the last day of his stay on the
territory of Azerbaija n Republic during the tax year, until the end
of this tax year only if this person is non- resident of Azerbaijan
Republic in the following tax year.
13.2.5.3. Any legal person established in accordance with the
legislation of Azerbaijan Republic and involved in entrepreneur
activities or with the place of management on the territory of
Azerbaijan Republic. For the purposes of this Article the legal
entity management location shall be deemed the location of main
operations, in which the commercial decisions are taken as
required for management, and at which the daily practical
management is performed, independent of location of main control
bodies.
13.2.6. Non- resident:
13.2.6.1. persons holding diplomatic or consular status on the
territory of Azerbaijan Rep ublic, or family members of such
persons;
13.2.6.2. staff members of international organizations that had
passed the appropriate state registration on the territory of
Azerbaijan Republic or person on the national service of foreign

country in the Azerbaijan Republic, as well as their family
members;
13.2.6.3. person passing from one foreign country to another
through the territory of the Republic of Azerbaijan;
13.2.6.4. articles 13.2.6.1. and 13.2.6.2. of this Code not to be
applicable for persons involve d in entrepreneur activities on the
territory of Azerbaijan Republic.
13.2.6.5. diplomatic representations, consular organizations and
other official representations of foreign states that hold the
diplomatic privileges and immunity, international organiza tions
and their representations as well as representations of foreign
companies and firms not involved in entrepreneur activity;
13.2.6.6. other persons, to whom the definition of resident not to be
extended.
13.2.7. Taxpayer’s family members:
13.2.7.1. spouses;
13.2.7.2. parents, children and adopted persons;
13.2.7.3. heirs;
13.2.7.4. blood relative (not blood relative) sisters (brothers);
13.2.7.5. nephews and nieces;
13.2.7.6. sisters, brothers and parent s of spouses;
13.2.7.7. spouses of sisters and brothers;
13.2.7.8. sisters (brothers) of parents;
13.2.7.9. guardians and wards, when linked to each other as the
result of same household management as parents and children.
13.2.8. В«GoodsВ» – any tangible or intangible property (assets),
including electrical and heat energy, gas and water.
For the purposes of value added tax (VAT) intangible assets, monetary means and
land shall not be recognized as goods.

13.2.9. Intangible assets- intellectual property, i ncluding trade marks,
other aspects of industrial property as well as similar rights recognized as
the property of taxpayer in the order established by appropriate legislation.
13.2.10. Sell of goods – concession of the right of ownership on goods to
other person; including, but not limited to, sell of goods, their exchange,
donation, payment in kind for labour and other in kind payments, as well
as the transfer of right of ownership on mortgages to the lender or other
person;
13.2.11. Service (work) – activ ity that does not involve provision of any
commodities and has financial value.
For VAT purposes the transfer of ownership on monetary means and land to other
party as well as provision of contracted employee services is not allowed.
If commodities used during provision of services (implementation of works) are
not provided separately or compensation costs not included in the value of
services (works) and are not indicated separately in the agreement or payment
documents, such goods or commodities shall be considered an integral part of the
service (work).
13.2.12. Non- sale incomes- income from holding shares in other
enterprises, incomes obtained from sales of enterprise stocks, bonds and
other securities, as well as other incomes obtained from operations
i ndirectly linked with production and sales of commodities and services
(works), including the amount obtained as penalty or loss compensation,
increased exchange variation, amount of creditor and deponent debts on
foreign exchange operations in accordance with legislation.
13.2.13. Name of taxpayer, buyer, customer or any person – name of legal
entity passed state registration, full name of natural person.
13.2.14. Financial Services:
13.2.14.1. the granting or transferring of credits, financial leasing
ope rations , credit guarantees and other pledge guarantees in
monetary -credit transactions, including the management of credits
and credit guarantees by the grantor;
13.2.14.2. any transaction connected with the management of
deposits and accounts of clients, payments, transfers, debt
obligations and payment instruments;

13.2.14.3. any transaction connected with the circulation of
currency, monies or bank notes that are legal tender (with the
exception of those used for numismatic purposes);
13.2.14.4. any transaction connected with the circulation of shares,
bonds, certificates, bills, checks or other securities. Services on
safekeeping of bills, securities and other valuables are not financial
services;
13.2.14.5. any transaction relating to financial derivati ves, forward
contracts, options and similar arrangements;
13.2.14.6. any service related to the management of investment
funds;
13.2.14.7. any insurance or re -insurance transactions.
13.2.15. Dividend — payment in money or other form, made by legal
perso n to its founders (or shareholders) as distribution of net income,
profit upon the payment of all costs and taxes by payers of simplified tax.
Income from the distribution of property upon liquidation of a legal entity, as well
as payments made with distribution of shares without changes to percentage of
shares owned by shareholders and re -call of stocks (shares) within their nominal
price, shall not be considered a dividend.
13.2.16. Income from an Azerbaijani Source –
13.2.16.1. income derived from employ ment in the Republic of
Azerbaijan;
13.2.16.2. income derived from sale by manufacturer of goods
produced in Azerbaijan Republic;
13.2.16.3. income derived from producing goods, performing work
or rendering services in the Republic of Azerbaijan;
13.2.16.4. income derived from an entrepreneurial activity
attributable to a permanent establishment located on the territory of
the Republic of Azerbaijan, to include income from the sale of
similar goods (works, services), that can be considered as goods
(works, services) sold by said permanent establishments as well as
income from activity that can be considered as activity
implemented by such permanent establishment or comparable
activities;

13.2.16.5. income derived from an entrepreneurial activity on the
territory of Azerbaijan Republic:
 from writing off bad debts of taxpayer by creditors;
 from selling fixed assets defined as income pursuant to
Article 114.7 of this Code;
 from compensation of costs or decrease of reserves
pursuant to Article 141 of this Code;
13.2.16.6. income in the form of dividends received from a
resident legal entity and from the realization or cession of an
equity share in said legal entity to another person;
13.2.16.7. income in the form of interest received from residents;
13.2.16.8. pension paid by a resident;
13.2.16.9. income in the form of interest received from a person
with a permanent establishment or property located in the territory
of the Republic of Azerbaijan – if the indebtedness of said person
relates to said permanent es tablishment or property;
13.2.16.10. income in the form of royalties paid in connection with
location or use of property located on the territory of the Republic
of Azerbaijan, or income from the sale of property stipulated in
paragraph 13.2.23 of this Art icle, which is located or used in the
Republic of Azerbaijan;
13.2.16.11. income from the lease of movable property utilized in
the Republic of Azerbaijan;
13.2.16.12. income from real property in the Republic of
Azerbaijan, including from the transfer of participating shares in
said property;
13.2.16.13. income from the transfer of stocks or participating
shares of an enterprise whose assets, exceeding 50 percent, directly
or indirectly, from the value of real property in the Republic of
Azerbaijan;
13.2.16.14. other income arising from the transfer of property that
is not connected with resident’s entrepreneurial activity;
13.2.16.15. income from management, finance services – if such
income is paid by a permanent establishment of resident or non-
residen t legal person located in the Republic of Azerbaijan, or if

said income has been generated by virtue of a contract signed with
said enterprise or permanent establishment;
13.2.16.16. income paid as insurance payment under agreements
on the insurance or re -insurance of risks;
13.2.16.17. income from telecommunication and transportation
services during international communication and shipments
between the Republic of Azerbaijan and other states;
13.2.16.18. other income arising by virtue of activity in the
Re public of Azerbaijan, which is not stipulated in above
paragraphs. When determining the source of income according to
this paragraph, the place where the income is paid shall not be
taken into account, as well as either it paid directly or indirectly.
13.2.17. Fixed Assets – tangible assets with a service life of more than one
year, the value of which exceeds 100 manats that are subject to
amortization in accordance with Article 114 of this Code.
13.2.18. Interests – any charge relating to a debt obligation , including
payments for credits (loans) and deposits (accounts).
13.2.19. Net Profit – profit less profit tax;
13.2.20. Participant – shareholder, partner or other participant in an
enterprise’s profit.
13.2.21. Property – any moving or real property to include non- tangible
assets, turnover funds and other objects of ownership rights.
13.2.22. Residual value of property – the original value of fixed assets on
enterprise’s balance less the amount of amortization calculated on this
fixed assets.
13.2.23. Royalty – payments for use of copyrights or rights on the use of
works of literature, art and science; software and films, and other non-
tangible assets , any information of patenting, trade marks, design or
model, plan, secret formula or process, industri al, commercial and
scientific expertise, use of industrial, commercial or scientific equipment
or transfer of rights to use such products.
13.2.24. Cash register — electronic equipment or computer systems
used for registration of payments for goods (works, services) provided,
with fiscal memory and appropriately registered by tax authorities.

13.2.25. Forward contract- agreement, confirming the obligation to
purchase (sell) securities, goods or monetary means in future at specified
time and indicated terms at the price indicated at the time of when such
forward contract was signed.
13.2.26. Option- the document confirming the right of person to purchase
(sell) securities, goods or monetary means in future at specified time and
indicated terms at the price fixed at the time of making such option or the
time of such purchase by the agreement of parties.
13.2.27. Non- commercial activity – it is a conduct of legal activity the
purpose of which is not generation of profit and that stipulates the use of
income received in non- commercial purposes only, including the purposes
of its charter. Otherwise such activity shall be considered as commercial.
13.2.28. Non-commercial organization – legal person that conducts non-
commercial activity, does not distribute the generated income between its
founders (shareholders) and does not use such income for commercial
purposes. Otherwise such organization shall be considered as commercial.
13.2.29. Export of Goods – removal of goods from the territory of the
Republic of Azerbaijan, which are considered export goods according to
customs legislation.
13.2.30. Re -export of Goods – export of goods that are considered re –
export goods in accordance with customs legislation by the person
importing said goods, provided that such goods are in the same condition
as were when imported.
13.2.31. Import of Goods – importation of goods into the territory of the
Republic of Azerbai jan, which are considered import goods according to
customs legislation.
13.2.32. Re -import of Goods – import of goods that are considered re –
import goods in accordance with legislation by the person exporting these
goods, provided that such goods are in t he same condition as were when
imported.
13.2.33. Transit through the Territory of the Republic of Azerbaijan –
transportation of goods through the territory of the Republic of Azerbaijan
between two frontier posts of the Republic of Azerbaijan in accordan ce
with procedures established by customs legislation.
International transportation – cargo and passenger transportation between the
Azerbaijan Republic (through the border of the Azerbaijan Republic) and post
located in the other state.

13.2.34. Employment- performance of duties by physical person in
accordance with agreement (contract) for compensation payment regulated
by labor c ode. Any physical person engaged in employment shall be
termed В«the employeeВ» in this Code. A person who pays for the service
rendered by such physical person as an employee shall be termed В«the
employerВ» and said payment shall be termed В«the salaryВ» .
13.2.35. Charity shall be defined as that activity natural person and/or
charity organization performs, which consists of rendering assistance, to
include the transfer of monies, without compensation, to physical persons
in need of material or other assi stance (aid), or to organizations and
charitable organizations that directly provide such assistance (aid),
including charity organizations. Scientific, educational activities
performed in the public interest shall be considered charity except where
otherw ise stipulated in this Code. Assistance (aid) given shall not be
construed as charity if:
13.2.35.1. the recipient of said assistance (aid) assumes any
obligation to the provider, which is of a property or non- property
nature (with the exception of obligat ions to utilize the funds or
property received as targeted);
13.2.35.2. the recipient and provider of said assistance (aid) are
deemed to be interrelated;
13.2.35.3. said assistance (aid) is rendered to any physical person
or legal entity with the intent o f helping that person or entity
participate in an election campaign.
13.2.36. Charity organization- non-commercial organization conducting
charity activities.
13.2.37. Entrepreneurial (commercial) activity – any activity of
entrepreneur, performed independently, at own risk, with the purpose of
profit obtaining from use of the property, supply of goods, fulfillment of
works or services.
13.2.38. Budget organization- non-commercial organization activity of
which is financed in part or in full with funds from the treasury on a
budgetary estimate and which does nor have a payments account.
13.2.39. Enterprise – for the purposes of this Code enterprises are the
structures involved in entrepreneurial activities and established for such
activities. This is to inclu de:

13.2.39.1. legal entities established pursuant to Republic of
Azerbaijan law;
13.2.39.2. legal persons established in accordance with the
legislation of foreign state (corporations, companies, firms and
other similar structures), their branches and rep resentative offices;
13.2.39.3. branches, sub- elements or other separate units of legal
persons, outlined Article 13.2.39.1 of this Code, which have their
own balance sheet, separate ledgers or other accounts.
13.2.40. VAT deposit account— single treasur y account, on which the
operations are performed associated with receipt, registration and
movements of VAT and its payment to state budget.
13.2.41. Commercial Legal Entity — structure defined as such by the
Civil Code of the Azerbaijan Republic.
13.2.42. Non- commercial legal entity — structure defined as such by the
Civil Code of the Azerbaijan Republic.( 3, 6, 9, 11, 15,19, 21
)
Article 14. Market value
14.1. Market value – th e price of the good (work, service) based on interrelation of
demand and supply.
14.2. Unless otherwise stipulated by this article, for the purposes of taxation the
price of goods (works, services) fixed for operation (deal) shall be used. Unless
otherwise proved this price shall be used as market value.
14.3. The calculation of taxes with consideration of market value can be used:
14.3.1. during barter (swap of goods), import -export operations;
14.3.2. during implementation of deals between interrelated pe rsons;
14.3.3. at price deviation for more than 30 percent (either side) within 30
days from the pricing level applied by taxpayers on analogue or similar
goods (works, services);
14.3.4. when insuring the company property for the amount in excess of its
depreciation value.
14.4. The market value shall be determined until the good (work, service) is sold,
but not later than 30 days from the moment the good (work, service) is sold at the
price established on the closest date (before or after) at appropriate deals on

identical (analogue) goods (works, services). The market value of securities shall
be determined based on stock exchange rate for identical securities of the same
emitter on closest previous date from the moment these securities were sold, only
if such rates were announced in accordance with procedure above.
14.5. During the determination of market value, the deal between interrelated
persons, as defined in Article 18 of this Code, shall be considered only if their
relations did not have any impact s on the result of such deal.
14.6. If provisions of Articles 14.4. and 14.5 of this Code are not applicable, the
market value of good (work, service) shall be determined in accordance with
requirements of this Article . The regular costs on production and/ or marketing
(purchase price and residual value) of good (work, service), transportation,
storing, insurance and other similar costs shall be considered as well as added
values and discounts practiced during deals between non- interrelated persons, that
wil l consider the factor of demand and supply. Specified costs shall be considered
also when the good losses its quality or other consumer characteristics or
expiration (close expiration) date as well as other similar cases.
14.6.1. Following factors are take n into consideration in determination of
the market prices of goods (works, services), which can influence the
prices:
14.6.1.1. volume (volume of goods batch) of delivered goods
(implemented works and rendered services);
14.6.1.2. obligation execution ter m, payment provisions;
14.6.1.3. change of demand for goods (works, services) and supply
(including seasonal fluctuations of consumer demand);
14.6.1.4. country of origin of goods, place of purchasing or
procurement;
14.6.1.5. delivery terms for goods (wor ks, services);
14.6.1.6. the quality level of goods and other consumption
indicators;
14.6.1.7. in relation with implemented marketing policy
introduction on market of new, non- analogue goods (works,
services), or introduction of goods (works, services) to new
markets, provision of samples of goods with the purpose of
acquiring of consumers;

14.6.1.8. in determination of market prices on execution of works,
provision of services, including in the area of repair, construction,
installation works, transportation, leasing, education, medical
services and other areas, taken into consideration the area of work
execution, and provision of services, their qualitative indicators
and other circumstances, which can affect the price.
14.6.2. In determination of prices in connection with quality of goods
(works, services) below market price, quality levels are confirmed by
competent person.
14.6.3. If on relevant goods (works, services) market with similar or same
kinds of goods (works, services) no operations are conduc ted, and it is not
possible to collect the information on market prices of these goods (works,
services) from official or open sources, following evaluation methods can
be applied:
14.6.3.1. On the basis of subsequent (secondary) selling price
Market prices of goods (works, services) are determined on the basis of
subsequent (secondary) selling price of these goods (works, services). The market
price is determined with deduction of applied raise from subsequent selling price. 14.6.3.2. On the basis of value accumulation method
Market prices are calculated with accumulation of costs and profits, motivated by
the party providing goods (works, services).
14.6.3.3. If market prices of goods (works, services) can not be
determined by one of the methods establishe d in this Article,
market prices are determined by contractor expert.
14.6.4. Determined market prices are used only for the purposes of
taxation and goods (works, services) are considered by actual selling
price in accordance with procedures stipulated under the legislation.
14.6.5. If the purchasing price of purchased goods (works, services)
exceeds the market price for more than 30 percent and its value contains
costs deducted from income, the value of these goods (works, services) is
assigned for costs deducted from the income on market values, and taxes
are re -calculated in following cases:
14.6.5.1. in cases, if unreasonable increase of actual of purchasing
price of purchased goods (works, services) is detected;

14.6.5.2. if it is not possible to determine the supplier of goods
(works, provider of services).
14.6.6. If the price level applied to provided goods (works, services) of
taxpayers, will significantly be below 30 percent level of market values,
determined on the basis of this Code, then taxes are calculated on the
basis of market prices, and if exceeds it, then on actual provided prices
14.7. The complex of deals, providing the delivery of goods (works, services) by
one party and their exchange for other goods are the part goods swapping
(works/ services swapping) deals. The market value of delivered (purchased)
goods (works, services) on the basis of such deals shall be determined in
accordance with provisions of this Article.
14.8. The taxpayer holds the right to submit to state tax authority the evidences
that market values for goods (works, services) are determined in certain deals in
accordance with the procedure that differs from one stated in this article.
14.9. During the determination and recognition of goods (works, services) market
value the official sources of information on market values of goods (works,
services) and exchange rates, databases of state and local authorities, information
submitted by taxpayers to state tax authorities, information of advertisement
sources and other appropriate information shall be used.
14.10. During provision and purchasing of goods (works and services) (with
exception of exports, prices for which are regulated by the relevant executive
authority, for the purposes of taxation are used the prices, establi shed by the
relevant executive power authority. ( 3, 9
)
Chapter II. Taxpayer. Tax A gent
Article 15. Taxpayer’s rights:
15.1. The taxpayer holds the following rights:
15.1.1. to receive the free of charge written information from on existing
taxes and tax regulations, that control the procedures and conditions of tax
payments, rights a nd responsibilities of taxpayers and well as rights of tax
authorities and their officials;
15.1.2. to receive from tax authorities clarifications on issues related to the
application of tax legislation;
15.1.3. to take advantage of tax privileges in event s and in accordance
with the procedures specified by tax laws;

15.1.4. to require the timely return or crediting of overpaid or overcharged
taxes;
15.1.5. directly or via their representatives to participate in tax relations
outlined by legislation;
15.1.6. to receive copies of acts (protocols) made in relation with tax
inspection and decisions of tax authorities;
15.1.7. to require tax authorities and their officials to follow the terms of
tax legislation on taxpayer;
15.1.8. not to follow unlawful acts (decisions) and requirements of tax
authorities and their officials that do not correspondent with the Tax Code
and other legal acts on taxes;
15.1.9. to appeal administratively and(or) in court in accordance with
established procedure the decisions (omission) of tax authorities and their
officials;
15.1.10. to require the provision of commercial (tax) confidentiality in
accordance with established procedure;
15.1.11. to require in accordance with established procedure the
compensation for all losses caused b y illegal acts (decisions) of tax
authorities or unlawful actions of their officials;
15.1.12. to review the acts and other materials of tax inspections, to
express to tax authorities and their officials own opinion on calculation
and payment of taxes, as well as on the acts of tax inspections conducted;
15.1.13. In connection with changes to production volume or sales
turnover upon last check, conducted by chronometer method, to request
tax authorities to conduct new check by chronometer method;
15.1.14. t o order the defined model of cash register for registration in
established order in tax authorities;
15.1.15. perform cash payment of taxpayer engaged in activities stipulated
under Article 16.1.8 of this Code via cash registers.
15.1.16. to take advantage of other rights established by this Code and
legislation;
15.2. Rights and legal interests of taxpayers are guaranteed by legislative
regulations.

The procedure on protection of rights and interests of the taxpayer shall be
determined by this Code and other legislation.
The rights and legal interests of taxpayer shall be provided by the authority of tax
bodies and their officials.
The failure to execute or insufficient execution of duties on protection of rights
and legal interests of the taxpayer shall in volve the responsibility established by
the legislation.
15.3. the taxpayer can participate in tax relations directly or through his
authorized representative, unless otherwise stipulated by this Code.( 6, 16, 20, 21
)
Article 16. Taxpayer’s responsibilities
16.1. The taxpayer is responsible:
16.1.1. to pay for taxes legally established;
16.1.2. to receive the taxpayer’s identification number (TIN) from tax
aut horities;
16.1.3. to keep the record of all incomes (costs) and articles of taxation;
16.1.4. to submit the tax report to tax authorities in events and in
accordance with procedures established by the legislation and in events
when audit is required, to submit the conclusion by auditor;
16.1.5. to follow lawful requirements of tax bodies to remedy indicated
violations of tax legislation as well as not to cause any obstructions to the
lawful activities of tax authority officials;
16.1.6. to submit to tax aut horities and their officials necessary
information and documents in events and in accordance with procedures
established by this Code;
16.1.7. for the period stipulated by the legislation to provide the
safekeeping of accounting books and other documents necessary for tax
calculation and payment, as well as documents that confirm incomes
obtained (for legal persons also costs incurred) and paid (withheld) taxes;
16.1.8. perform cash settlements with use of cash register, with exception
of following operations:
16.1.8.1. sells of newspapers and magazines (in the event if these exceed
50 percent of total sells turnover);

16.1.8.2. sells of securities;
16.1.8.3. sells of lottery tickets;
16.1.8.4. passenger and cargo transportation (by railroad, air,
water and automobile transport) (with exception of taxis with less
than six seats, on which shall be installed taximeters in accordance
with legislation);
16.1.8.5. sells in bazaars, fairs and on carrying of agricultural
products;
16.1.8.6. operations of glassware and scratch metal acceptance
points;
16.1.8.7. telecommunications services (with exception of Internet –
club operations);
16.1.8.8. advertisement services;
16.1.8.9. utility and housing facilities;
16.1.8.10. leasing of resident and non- resident facilities;
16.1.8.11. hotel, camping, motel and dormitory services;
16.1.8.12. operations of the power, gas, water, heated water and
central heating suppliers, elevator and security services;
16.1.8.13. sewage and sanitary -cleaning services;
16.1.8.14. excursion and tourist, sanatorium-resort and spa
services;
16.1.8.15. fitness and sports services;
16.1.8.16. medical services;
16.1.8.17. attorney, notaries public and other legal services;
16.1.8.18. educational operations of educational institutions and
training course activities;
16.1.8.19. motor parking activities;
16.1.8.20. cloth dry -cleaning, painting and laundry;

16.1.8.21. apartments repair and construction;
16.1.8.22. ceremonial services at non- stationary points and related
leasing;
16.1.8.23. pawn- shop services;
16.1.8.24. binding services;
16.1.8.25. mobile retail sales from counters, automobiles and
trailers on markets and other trading points;
16.1.8.26. banking activities, as well as insurance and insurance
mediation services;
16.1.8.27. following activit ies implemented, provided that number
of employees does not exceed 2 people:
16.1.8.27.1. furniture repair and manufacturing;
16.1.8.27.2. photo- , audit-video services;
16.1.8.27.3. repair and private production of footwear,
clothing, knit and leather products;
16.1.8.27.4. repair of clocks, TV -sets, refrigerators and
other household appliances;
16.1.8.27.5. technical and other services to technical
means;
16.1.8.27.6. barber services;
16.1.8.27.7. repair and production of jeweler and metallic
items;
16.1.8.27.8. activities of arts studios and restoration
facilities.
16.1.9. in implementation of cash payments provide the receipt, cheque,
bank statements and other strict reporting forms to the buyer and provide
the reflection of information specified under l egislation, in these cheques,
bank statements or strict reporting forms;
16.1.10. in the event of damages or other disorders incurred to cash
register during the operations, tax authorities shall be informed

immediately and use of cash register shall be seized temporarily and
ensure registration of cash payments within such period of time in an
order stipulated by the respective executive authority;
16.1.11. introduction of relevant notes to information sections of duplicate
certificates, received from tax authorities for opening of accounts for the
purposes of entrepreneur activities in non- resident banking institutions
and other non- resident credit organizations, and their submission to tax
authority before the term of operations performance on these accounts;
16.1.12. other responsibilities established by this Code and legislation.
16.2. If the taxpayer was not involved in entrepreneur activities within the
reporting period or did not implement any taxable operations, he shall submit the
note to the tax authority instead of tax report.
16.3. If the taxpayer has temporarily stopped the entrepreneur activity or other
taxable operations within the tax year, he shall submit to the tax authority the
note dated no later than the date of stoppage of entrepreneur activity. The note
shall include the time of stoppage of entrepreneur activities or other taxable
operationsВ».
16.4. In accordance with Articles 16.2 and 16.3 of this Code, if the taxpayers
submitting the note, have the property and (or) land, tax reports on property
and/or land shall be submitted to the tax authority in accordance with procedures
and terms, established by this Code.
16.5. Notes stipulated under Articles 16.2 and 16.3 of this Code, shall loss their
force from the date appearance of obligati on for submission of tax reports. (6, 9
,
16, 21, 23, 30 )
Article 17. Tax agent
17.1. Tax agent – person who in accordance with this Code is authorized to
calculate taxes, withhold them from the taxpayer and make the payment to the
budget.
17.2. The t ax agent shall have the same rights as a taxpayer unless otherwise is
stipulated by legislation.
17.3. The tax agent is responsible:
17.3.1. correctly and timely calculate, withhold from the taxpayer and
transfer appropriate taxes;

17.3.2. to keep the record of taxes paid by the taxpayer, withheld and
transferred appropriately, including those which are personal for each
taxpayer;
17.3.3. to submit to state tax authorities documents necessary to control
the correctness of tax calculation, withholding and pa yment;
17.3.4. within 30 days to inform the tax authorities with which registered
in writing on impossibility to withhold the tax from the taxpayer and the
amount of taxpayer`s debts;
17.3.5. to perform other duties set by this Code.
17.4. For failure to e xecute or insufficient execution of his duties the tax agent
shall hold the responsibility in accordance with procedure stipulated by this Code
and other legislation.
17.5. For failure to execute or insufficient execution of his duties by tax agent,
due to the fault of person under whose management this tax agent is, the
responsibility in accordance with this Code and other legislation shall be laid on
person the tax agent reports to.
Article 18. Interrelated persons 18.1. Interrelated persons for the purposes of taxation are natural and/or legal
persons, relations between which might have direct effect on economic results of
their activities or the activities of persons they represent.
18.2. For the purposes of this Article persons shall be considered as i nterrelated:
18.2.1. if one person directly or indirectly has a share in other
person’s property and his share or vote is not less than 20 percent;
18.2.2. if one person reports to another person due to his ranking or one
person is under the direct or indirect control of other person;
18.2.3. if persons are under the direct or indirect control of the third
person;
18.2.4. if persons have a direct or indirect control over the third person;
18.2.5. family members indicated in article 13.2.7. of this Code.
A rticle 19. Permanent establishment.

19.1. The permanent establishment of legal or natural non-resident person in the
Azerbaijan Republic is the place in which such persons themselves or via their
authorized representatives fully or partially conduct their entrepreneurial activities
in the Azerbaijan Republic for the cumulative period of not less than 90 days
within any 12 months.
19.2. The permanent establishment shall include, but not to be limited to
following:
19.2.1. the place of management;
19.2.1. subdivision;
19.2.3. office;
19.2.4. branch or agency;
19.2.5. construction and repair sites, installation and assembly facilities, as
well as supervisory activities associated therewith;
19.2.6. platforms, sites, drilling equipment or vessels used for the
e xploration and production of natural resources, as well as supervisory
activities associated therewith;
19.2.7. any fixed base (location) where a non -resident physical person
carries out entrepreneurial activity;
19.2.8. premises used for the provision of consulting services;
19.2.9. any places of employment in which other types of entrepreneurial
activity conducted on the territory of Azerbaijan Republic;
19.2.10. persons executing functions of the permanent establishment for
non- resident enterprises or non- resident natural person in the Azerbaijan
Republic, or people acting on their behalf, authorized to make agreements
on their behalf and usually conducting such responsibilities;
19.2.11. places of goods’ manufacturing and sale, execution of works
and s ervices;
19.3. Different from provisions of article 19.2. of this Code, following shall not be
considered as activities performed by permanent establishment:
19.3.1. storing and demonstration of goods and products belonging to non-
resident enterprise;

19.3.2. storing stocks of goods or products belonging to a non-resident
enterprise for eventual processing and subsequent export from the
Republic of Azerbaijan by a third party;
19.3.3. purchase of goods or manufacturing of products by non- resident
enterprise for its own needs;
19.3.4. implementation by non- resident enterprise of any preparatory or
support activity for its own needs;
19.3.5. the joint execution of any types of activities specified in articles
19.3.1- 19.3.4. of this Code.
19.4. For the purposes of this Article any place in Azerbaijan Republic where
legal or natural non- resident person conducts activities for the cumulative period
of not less than 90 days within any 12 months shall not be recognized as
permanent establishment; in this event the income from Azerbaijanian source in
accordance with articles 125 and 169 shall be taxed at the source of payment.
Chapter III. State Tax Authorities (Agencies)
Article 20. State Tax Authorities and their purpose
20.1. State Tax Authorities in the Azerbaija n Republic are the appropriate body of
executive power and tax bodies under its direct management.
Within their level of competence tax authorities are holding the authority of law
enforcement agencies.
20.2. State authorities are conducting their activiti es independent from local
authorities of executive power.
Decisions made by tax authorities within their level of competence shall be
obliging for all legal and natural persons.
20.3. Tax authorities shall be relieved from the payment of state fee for cour t
applications proceedings.
20.4. The tax authorities shall exercise control over timely payment of taxes, with
the exception of local taxes (municipal taxes), as well as road tax, VAT and excise
tax, deduction of which is the responsibility of customs aut horities.
20.5. When it is stipulated by this Code, authorities of tax bodies on road fund tax
and in the area of import and export operations shall be conducted by customs in
events and in accordance with procedures established by the legislation.

20.6. Authorities indicated in article 20.5. of this Code shall act within their level
of competence on the basis of this Code, Customs Code, other laws of the
Azerbaijan Republic and legislative acts approved in accordance with thereof. ( 6
,
11, 14 )
Articl e 21. Legal bases for the activity of State Tax Authorities
The Constitution of the Azerbaijan Republic, this Code and other legal normative
acts of the Azerbaijan Republic shall be the legal bases for the activity of the State
tax authorities.
Article 22 . Social Protection of State Tax Employees and Material Incentives and
Development Fund of State Tax Authorities
22.1. Social protection of State tax employees shall be guaranteed by the State,
they shall be insured, on a compulsory basis, at the expense of the state budget.
The procedure and conditions of compulsory insurance shall be established by the
legislation.
Where a serious bodily injury is caused to a State tax employee, which prevents
him from engaging in his professional activity, such employee shall receive from
the budget the difference between official salary and pension.
Damage caused to the property of a State tax employee and his family members in
relation with his professional duty shall be fully compensated from the state
budget, the rel evant amount further being collected from the person in fault.
22.2. For the purposes of social security of employees of tax authorities at the
account of 25 percent ( not to exceed 30 percent of funds allocated from the state
budget for support of tax authorities ) from the amount of financial sanctions,
applied by tax authorities and paid to state budget, the non- budgetary fund of
these authorities shall be established. (
11, 16, 21, 28 )
Article 23. Rights of State Tax Authorities
23.1. State tax authorities shall have the following rights:
23.1.1. to perform the operative tax control, desktop and on site tax
inspections in cases and in accordance with procedures established under
this Code ;
23.1.2. with respect to legal and physical persons, to examine all financial
documents, accounting books, reports, estimates, cash, securities, and
other assets on hand, returns, declarations and other documents relating to
the calculation and payment of taxes, as well as receive from officials and
other employees of organizations and individuals information and oral and

written explanations on questions arising in the course of such
examination;
23.1.3. to examine, in accordanc e with the law in force, all production,
storage, commercial and other premises ( on the territories), maintained by
organizations and individuals with the purpose of generating income or
keeping taxable objects and conduct observation of such premises through
chronometrical methods, to obtain documents and objects in cases,
stipulated by the present Code, to conduct inventory of property, owned or
used by it (except for residential areas), in accordance with the procedure
established by respective executive power body;
23.1.4. to require the taxpayers to remedy the cases of violation of tax
legislation and also, in cases when taxpayer shall be checked by auditor –
auditor conclusion;
23.1.5. to review as stipulated in legislation the cases on violation of ta x
laws, to add interests for underpaid taxes of legal and natural persons, to
apply financial sanctions and administrative penalties to such persons;
23.1.6. to provide in accordance with procedure established by the
legislation, payment to the state budge t, interests, financial sanctions and
administrative penalties that are not paid in due time;
23.1.7. to issue to banks and other credit organizations the instruction,
which shall be an executive (payment) document, to arrange for execution
of administrati ve penalties for collection of arrears and tax interests,
applied financial sanctions , calculated in accordance with legislation, to
the state budget from the settlement, foreign currency and other accounts
of taxpayers;
23.1.8. to file claim in the court of law on arresting the payment, current
and other accounts of the taxpayer in cases and in accordance with
procedure established by the legislation, to take measures on
taxpayer’s property inventory in accordance with this Code;
23.1.9. to question citi zens on tax issues in cases and in accordance with
procedures established by the Law of Azerbaijan Republic on
В«Investigation activityВ»;
23.1.10. to enter and conduct the inspection of premises (with the
exception of living premises), facilities and land s in cases and in
accordance with the Law of Azerbaijan Republic on В«Investigation
activityВ»;

23.1.11. to make test purchases of commodities lands in cases and in
accordance with the Law of Azerbaijan Republic on В«Investigation
activityВ»;
23.1.12. to c onduct interrogation in accordance with procedures
established by the Criminal Code of the Azerbaijan Republic;
23.1.13. if unmarked excise commodities are found to provide the
inventory of such commodities and pass them to the taxpayer for
responsible storing or his consent, in locations determined by executive
representatives of tax authorities ;
23.1.14. to invite specialists, experts, translators and witnesses in
accordance with procedures established in this Code;
23.1.15. in accordance with legislation to organise sales of commodities
without excise marks or marked by forged excise marks confiscated by the
court decision.
23.1.16. to use other rights stipulated by this Code and other legislative
acts of the Azerbaijan Republic in accordance with objecti ves of state
authorities.
23.2. Superior tax authorities hold the right to cancel unlawful acts and decisions
of subordinate tax authorities and their officials. ( 3, 6, 9, 14, 15
)
Article 24. Responsibilities of State Tax Authorities
24.0. State tax authorities shall:
24.0.1. ensure that taxes are correctly calculated and paid i n full and on
time, to follow completely the tax legislation;
24.0.2. to follow and observe the statutory rights of taxpayers;
24.0.3. to provide the taxpayers with free information either via mass
media or individually on tax legislation and amendments to it, to explain
the procedure for fulfillment of report applications, to give explanations
on calculation and payment of taxes, to explain to taxpayers their rights
and responsibilities;
24.0.4. to keep the record of calculated and paid taxes and provide t he
information to relevant state executive authorities;
24.0.5. collect, analyze and assess information on the violation of tax
legislation, and take measures and, if necessary, submit proposals to

appropriate state bodies, for eliminating causes and circumstances
contributing to tax violation;
24.0.6. register taxpayers, their affiliates, representations, or other
subdivisions (objects), as well as cash registers ;
24.0.7. perform state registration and maintain state register of
commercial legal entities a nd provide to relevant executive authorities the
related information within procedures and terms stipulated under
legislation.
24.0.8. in accordance with provisions of this Code and legislation,
preserve the confidentiality of information concerning taxpa yers,
including the tax and commercial confidentiality;
24.0.9. to provide taxpayers with acts on the results of tax inspections,
and, in cases established by legislation, copies of decisions of tax
authorities;
24.0.10. to take measures established by leg islation on crediting or return
of overpaid amounts to the taxpayer, as well as return of taxes, financial
sanctions, interests and administrative penalties erroneously levied from
the taxpayers;
24.0.11. to control the activities of subordinate tax author ities;
24.0.12. to hold other responsibilities established by this Code, other
legislative acts of the Azerbaijan Republic in accordance with objectives
of tax authorities. ( 16, 21
)
Article 25. Rights and responsibilities of state customs authorities in the area of
taxation
State Customs Authorities shall hold the rights and take res ponsibilities in the area
of taxation during the movement of goods through the customs boundary of the
Azerbaijan Republic in accordance with this Code, Customs code and other
legislation of the Azerbaijan Republic.
Article 26. Relations between Tax Agenci es and other Governmental Bodies
26.1. Tax agencies shall exercise their duties shall interact with central and local
executive bodies and law enforcement, financial and other State authorities;
26.2. State governmental bodies shall be obliged to assist S tate tax authorities in
application of their duties and in some cases provide, upon request, necessary
information.

26.3. Customs bodies shall be obliged to furnish, on a regular basis, information
at their disposal to appropriate body of executive power, stipulated by article 20.1
of this Code.
Article 27. State Tax Officials
27.1. Officials of tax authorities are at the state service.
27.2. Officials of tax authorities are appointed and removed from their position in
accordance with procedure established by the appropriate body of executive
power.
27.3. Officials of tax authorities shall not have the right to be involved in any
entrepreneurial activity or any other type of paid activity, with the exception of
scientific, pedagogical and creative activity.
Article 28. Special Ranks of Officials of State Tax Authorities 28.1. The officials of tax authorities are given the special ranks in accordance
with their position, qualifications and duration of services.
28.2. The procedure for giving and removing of special ranking as well as other
issues related with special ranking shall be established by legislation.
28.3. The officials of State Tax Authorities shall have the right to wear the special
uniform and decorations in accordance with their special ranks. The sample of
mentioned uniform and decorations shall be approved by relevant authority of
executive power.
Article 29. Conflict of interests
29.0 State tax employees shall be prohibited from the conduct of their official
duties when:
29.01. there is kins hip between a official of tax authority and taxpayer;
29.02. official of tax authority or his family members have direct or
indirect financial interest in taxpayer (taxpayer’s activity).
Article 30. Commercial (tax) confidentiality 30.1. Tax authorities and their officials in the course of performing offic ial duties
(for the period of their work in tax authorities or after they were dismissed from
their duties) shall maintain secrecy regarding all information on taxpayers.

30.2. Any information received by tax authority and its officials from taxpayer
shall be considered as commercial (tax) secret and information about private life
with the exception of following:
30.2.1. disclosed by the taxpayer’s consent;
30.2.2. on taxpayer’s tax identification;
30.2.3. on statutory fund (statutory capital) of enterprise;
30.2.4. on tax violation and responsibility for such violations;
30.2.5. tax payments arrears;
30.2.6. i nformation in the state register of legal entities (except for
information about the founders (participants) of business legal entities
and their shares in the authorized capital.
30.3. Commercial (tax) confidentiality shall not be disclosed by tax authori ties
and their officials, with exception of cases stipulated by legislation.
The disclosure of commercial (tax) confidentiality shall include, but shall not be
limited to, mainly use or transfer to another person of commercial (tax)
confidential informatio n of the taxpayer that became open to the tax authority
official, invited expert or specialist during application of their duties in tax
inspection.
30.4. Information received by tax authorities that contain sensitive commercial
(tax) information shall be under the special access and storing regime.
The access to information comprising the commercial (tax) confidentiality shall
be available to officials by the lists approved by relevant body of executive
power.
30.5. The loss of information comprising the c ommercial (tax) confidentiality or
disclosure of such information stipulates the legal responsibility by the legislation.
30.6. Tax authorities and their officials indicated in article 30.1 of this Code, may
in the order established by the legislation provide to other agencies information on
taxpayer only in following cases:
30.6.1. to tax authorities and their officials for the purpose of carrying out
their duties;
30.6.2. relevant body of executive power for the purpose of prevention and
investigation of tax law violations with criminal case;

30.6.3. courts in the course of proceedings for establishing taxpayer’s
tax liability or responsibility for tax violations or offences, as well as other
criminal liability;
30.6.4. relevant government authorities of other states in accordance with
international treaties to which the Azerbaijan Republic is the party;
30.6.5. State social security and medical insurance funds — to the extent
necessary for the implementation of laws concerning social security;
30.6.6. customs authorities — for the purpose of administering customs
legislation.
30.7. Government authorities and their officials shall return the documents that
contain commercial (tax) confidentiality to the tax authorities that provided them
with such documents.
30.8. Information concerning taxpayer may not be disclosed to another person
without taxpayer’s written consent. (3, 15, 21 , 31
)
Article 31. Responsibilities of tax authority officials
31.0. Officials of tax authorities shall:
31.0.1. Follow this Code and other legislation of the Azerbaijan Republic;
31.0.2. within their level of competence apply the rights and
responsibilities of tax authorities;
31.0.3. be attentive to taxpayers, their representatives and other
participants of tax relations.
Chapter IV. Tax control
Article 32. Tax control – forms of tax control
32.1. The tax control is provided by tax authority for the purposes of complete
and timely collec tion of taxes. The tax control is a single system of control over
the registration of taxpayers and taxable bases as well as compliance with tax
legislation.
32.2. The tax control is provide by relevant executive authorities in cases and in
accordance with procedures stipulated by this Code and the Customs Code of the
Azerbaijan Republic. Control over calculation in accordance with legislation,
complete and timely payment of local taxes (municipal taxes) is conducted by
municipal tax authorities

32.3. The tax control is provided by tax and customs authorities and their official
within their level of competence in accordance with this Code, Customs Code of
the Azerbaijan Republic and other legislative acts.
32.4. Tax authorities perform the tax control via re gistration of taxpayers and
taxable bases, review of registration and accounting data, interview of taxpayers
and other persons, inspection of premises used for the generation of income and
other instruments established by this Code.( 6
)
Article 33. Registration of taxpayers
33.1. For the purposes of tax control implementation, taxpayer legal entities shall
be registered with tax authorities at place of registration (legal address, indicated
in the state registration documents), at the place of received income from the
Azeri source, if taxable income contains Azeri source and non- residents, who are
not subject at the place of income payment, and individual entrepreneurs and
residents – natural persons, which shall submit declaration in accordance with
provisions of the Code hereof – at place of residence, and private notaries – at the
place of their business,
During state registration the commercial legal entities, as well as representations
and affiliates of foreign commercial legal entities shall be assigned with
taxpayer’s identification number in accordance with provisions of legislation
this shall be deemed as their tax registration. The state registration certificat e
issued for the purposes of this Code shall be deemed a certificate, which verifies
the tax registration of the taxpayer.
33.2. Taxpayer which include branches, representations and/or establishments,
carrying out the activity outside the territory of tax authority as per place of the
taxpayer registration shall be registered as taxpayers at the place of their own
location as well as the locations of their branches, representations and/or
establishments.
Taxpayer registration at the location of its affiliat e, representative office or other
economic enterprise (facility) shall be performed in accordance with procedures
established by this Code, with note issued to the taxpayer.
Branches, structural and other separated units specified in Article 13.2.39.3 of
t his Code, which are engaged in entrepreneur activities of legal entities, as well
as branches and permanent representations of non- residents, established in
accordance with legislation of the Azerbaijan Republic, are registered separately
and issued the TI N.
Units, located out of location of budget and non- commercial entities of the
Azerbaijan Republic and established for the purposes of implementation of their
functions, may be registered separately and may be issued the TIN.

33.3. The registration of legal person as taxpayer with the tax authority or the
natural person who performs its entrepreneurial activity without the establishment
of legal person (individual entrepreneurs) shall be conducted independently from
presence of circumstances established by this Code for the obligation on tax
payments.
Diplomatic and consular representations of foreign states, operating on the
territory of the Azerbaijan Republic, as well as representations of international
entities can be registered by state authority in acc ordance with this Article.
33.4. The application on registration with tax authorities shall be submitted by
taxpayers to the tax authority at the place of their residence. The application to the
tax authority shall be submitted within 30 days from the date of state registration
of legal person, and for conduct of entrepreneurial activity in the Azerbaijan
Republic – within 30 days from the date of creation of branch or permanent
establishment.
The relevant authority of executive power that provides the stat e registration
along with registration documents shall issue to persons indicated in paragraph 1
of this Article the note indicating the date when these documents have been
issued.
The registration of permanent establishment shall be in accordance with
pro cedure established for legal persons in the Azerbaijan Republic.
Natural persons engaged in entrepreneur activities without formation of legal
entity, shall submit the application to the tax authority until the day of start of
entrepreneur activity.
Natural persons, who have the income, not subject to withholding tax
(withholding tax payment is not possible), or who have the royalty income, or
natural resident -persons, who have incomes from the sources outside of the
territory of the Azerbaijan Republic, shall submit the application to the tax
authority no later than on the date of occurrence of the right to obtain the income.
33.5. In cases stipulated by article 33.3. of this Code the tax authority shall within
5 days inform the individual entrepreneur on i ts registration.
33.6. Shall taxpayer have any difficulties related to determining the place for
registration the decision shall be made by tax authority based on the data
submitted by the taxpayer.
33.7. Large enterprises and entities with special tax regime, defined by relevant
executive authority, can be registered on centralized basis in following order:

33.7.1. Centralized registration of large taxpayers and enterprises with
special tax regime shall be conducted by tax authorities defined by
relevant executive bodies.
33.7.2. The assignment of identification numbers to large taxpayers and
enterprises with special tax regime shall be implemented in accordance
with this Code.
33.7.3. Persons registered by tax authority at the place of location, upon
their enlistment as large taxpayers or enterprises with special tax regime,
shall be subject to centralized registration on previous identification
numbers.
33.7.4. Tax registration of branches, representations or other economic
subjects (facilities) centrally registered as large taxpayers and enterprises
with special tax regime shall be implemented in the order established by
this Code.
33.7.5. Legal entities, registered by tax authority at the place of location,
within 15 days from the start of activities unde r special tax regime shall
apply for tax registration by the relevant tax authority, engaged in
centralized registration of taxpayers.
33.7.6. Centralized registration of enterprises engaged in special tax
regime activities, or removal from centralized reg istration shall be
implemented within the period of 15 days from the date of application to
the relevant tax authority, conducting their centralized registration, with
statement of start of activities in special tax regime or stoppage of such
activities.
33.7.7. The tax authority, identified by the relevant executive body, shall
annually, before May 15, make the decisions on exclusion of registration
from the place of location or centralized re -registration of enterprises
enlisted as large taxpayers, as wel l as any decision from their exclusion
from centralized registration.
33.7.8. Centralized registration of enterprises enlisted as large taxpayers
shall be implemented on the January of the following year, when the
decision was made to perform centralized r egistration.
33.7.9. Relevant executive authority shall annually before June 15 submit
to the relevant executive authority information on large taxpayers and
enterprises with special tax regime, which were excluded from registration
or re -registered centra lly, in accordance with the form agreed with
relevant executive authority.

33.8. Regulations of registration of divisions of the foreign state resident,
operating in the Azerbaijan Republic without the establishment of permanent
representation on the basis of international treaties with participation of the
Azerbaijan Republic concerning avoidance of double taxation, and also legal
entity according to the article 13.2.5.3 of the present Code considered as the
resident as per place of administration, shall be envisaged as follows:
33.8.1. Units not having permanent representations in the Azerbaijan
Republic, within 30 days from the start of activities in the Azerbaijan
Republic, and foreign legal entities, recognized as residents, shall submit
applications to tax authorities at their location within 30 days from the
date of recognition as residents in accordance with Tax Code of the
Azerbaijan or provision of international treaties to evade double taxation
to which the Azerbaijan Republic is a signatory.
33.8.2. Application for registration of units, which do not form the
permanent representation in the Azerbaijan Republic, as well as foreign
entities, recognized as residents at the place of operations, shall be signed
by foreign legal entity or its authorized representative.
33.8.3. For registration in tax authorities of units, which do not form the
permanent representation in the Azerbaijan Republic, as well as foreign
entities, recognized as residents at the place of operations no additional
documents are required in addition to those stipulated under Article 33.8
of this Code.
33.8.4. To application submitted for registration of the unit, which is the
resident of foreign state, not forming permanent representation in the
Azerbaijan Republic following shall be attached:
33.8.4.1. documents of registration in the county, in which the
foreign legal persons was registered (incorporated) and extract
from commercial registry;
33.8.4.2. decision of the competent authority of the resident of
foreign state on establish ment of unit, which is not forming
permanent representation in the Azerbaijan Republic;
33.8.4.3. foundation documents;
33.8.4.4. residency document approved by the tax authority;
33.8.4.5. document, verifying legal address in the Azerbaijan
Republic (leas ing agreement, confirming the right of ownership or
other documents);

33.8.4.6. copy of the document, verifying the identity of the head
(founder) of the unit;
33.8.4.7. information on income sources in accordance with the
form established by the relevant executive authority for units,
which do not form permanent representation in the Azerbaijan
Republic.
33.8.5. To application on registration submitted by foreign legal entity
recognized as resident at the place of operation, following shall be
attached:
33.8.5.1. documents of registration in the county, in which the
foreign legal persons was registered (incorporated) and extract
from commercial registry;
33.8.5.2. foundation documents;
33.8.5.3. document, verifying legal address in the Azerbaijan
Republic ( leasing agreement, confirming the right of ownership or
other documents);
33.8.5.4. copy of the document, verifying the identity of the head
(founder) of the unit;
33.8.5.5. information on structures, which are under direct or
indirect control in the Azerbaijan Republic and other countries, as
well as information on income sources in accordance with the form
established by relevant executive authority.
33.8.6. Documents stipulated under articles 33.8.4.1—33.8.4.4, 33.8.5.1
and 33.8.5.2, shall be legalized by the relevant executive authority or
representation of the Azerbaijan Republic in foreign states (consulates of
other states, representing interest s of the Azerbaijan Republic).
33.8.7. Documents specified in Articles 33.8.4 and 33.8.5, attached to the
application along with translation into Azerbaijani, verified by notary
office.
33.8.8. Removal from tax registration and annulling the TIN of the uni t of
the resident of foreign state, operating in the Azerbaijan Republic without
formation of permanent representation shall be conducted following
cases:

33.8.8.1. in liquidation of the entity, which is the resident of
foreign state, or the unit, which does not form the permanent
representation;
33.8.8.2. if the operations of the unit, which does not establish
permanent representation, forms permanent representation.
33.8.9. Removal of the tax registration and annulling of the TIN of foreign
legal entity, recognized the resident at the place of operation, shall be
performed in following cases:
33.8.9.1. during liquidation of the foreign legal entity, recognized
as resident at the place of operation, in the state, in which it was
registered (incorporated);
33.8.9.2. during change of the residency of the foreign legal entity,
recognized as resident at operation location.
33.9. The registration of payers of local (municipal) taxes shall be conducted by
municipal tax authority . (3, 6, 9, 11, 16, 21, 30
)
Article 34. Procedure for registration, re- registration and cancellation of
registration
34.1. The taxpayer (except for commercial legal entities and also representations
and branches of the foreign commercial legal entities) shall submit the
application to register with tax authority.
During the submission of application on registration taxpayers – legal persons,
their branches and establishments (except for commercial legal entities and also
representations and branches of the foreign commercial legal entities) along with
application shall submit the copies and information on location (address) and
charter (statues), documents, verifying the appointment of the director and
address of the legal entity, as well as document verifying the identity of the
director confirmed in accordance with established procedures.
Legal entities subject to taxation (except for commercial legal entities and also
representations and branches of the foreign commercial legal entities) shall be
registered upon the assignment of TIN to their superior organizations.
The application is fulfilled by the taxpayer of its authorized representative. The
taxpayer (its management) shall bear responsibility for accuracy of information
in their application.

During the submission of application for the registration the taxpayer- individual
entrepreneur along with application shall submit the copy of document that
confirms his personality and information on his addr ess.
During the registration of taxpayers who are natural persons following shall be
included in their personal details: last name, first name, middle name, date and
place of birth, sex, address, the details of document that confirms the personality,
infor mation on citizenship.
The application for registration shall be confirmed by relevant executive
authority.
34.2. The tax authority shall register the taxpayer within 2 days from the date
when application on registration was submitted along with other documents
specified in this article and at the same time to issue the relevant certificate to the
taxpayer. The Certificate, which is the main verification of the registration of
taxpayer, shall issued to the taxpayer only once and retained by him. If the
Cert ificate is lost or became useless, new copy of certificate shall be issued by the
application of the taxpayer. In this there is a record made on the issued copy, that
it is the new copy of the certificate.
The form of taxpayer’s registration certificate shall be approved by the
relevant authority of executive power.
34.3. In the case of change of the place of residence of the taxpayer he shall
submit the application to the tax authority within 40 days from the date of such
change. The re -registration (can cellation of registration with one tax authority and
registration with other) of the taxpayer shall be performed by the tax authority
with which the taxpayer was registered, within 15 days from the submission of
application by taxpayer on change of his res idence.
In the event of any change in information in the application form, submitted by
the taxpayer for registration in the tax authority, or in foundation documents, he
shall be submit within 15 days from the date of such change information to tax
author ity.
34.4. In the case of liquidation or re -organization of the legal person, the decision
by legal person on liquidation of its branch or permanent establishment, seizure of
activity through establishment, the seizure of activity by individual entrepreneur,
the cancellation of registration shall be performed on the basis of taxpayer’s
application with consideration of time limits established in Article 34.3. of this
Code.
In cases stipulated under Article 33.2. of this Code, during registration of legal
entity at the place of location, as well as place of location of branch,
representation or other production facility (facility), its branch, representation or

other production facility (facility) can be assigned with Taxpayer Identification
Number (TIN)
34.5. Registration, re -registration and cancellation of registration shall be
performed free of charge.
34.6. Each taxpayer shall be given a taxpayer’s identification number (TIN)
for all types of taxes including payments connected with movement of
commodities through customs borders of the Azerbaijan Republic. This number
shall be universal on the entire territory of the Azerbaijan Republic.
The tax authority shall indicate the taxpayer’s identification number in all
notices sent to the taxpayer.
34.7. Taxpayers shall indicate TIN in accounting, statistical reports, tax
calculations, contracts, invoices, receipts, cashier checks, letters, as well as in
customs, bank and other payment documents.
34.7.1. If TIN is not indicated in any payments, bank and customs
documents of the taxpayer, acceptance of these documents for execution
by relevant bank entities, tax and customs authorities is not allowed.
34.7.2. Changes in registration data of taxpayers shall be implemented on
the basis of applications, submitted by them under the form, approved by
relevant executive authority.
34.7.3. Removal from registration of the natural person, who is the
taxpayer, is possible in following cases:
34.7.3.1. removal from activities;
34.7.3.2. if found by the court to be missing or incapable in
accordance with procedures defined under legislation;
34.7.3.3. death.
34.7.4. In t he event of removal of the taxpayer from the registration, the
certificate of its registration shall be submitted to the tax authority. The
tax authority informs the bank office on recognition of the duplicate of
certificate as invalid.
34.8. Relevant executive authority on the basis of registration data shall maintain
the uniform state registry of taxpayers in accordance with this Code.

34.8.1. Taxpayers, when included in the uniform state registry, shall use
the data of registration application submitted to the tax authority. Uniform
state registry is maintained in paper and (or) electronic format.
34.8.2. Maintenance of the uniform state registry of the taxpayers contains
the following:
34.8.2.1. maintenance of the taxpayers registry log in
chronological order;
34.8.2.2. maintenance of the liquidated taxpayers registry log;
34.8.2.3. maintenance of amendments in relation to changes in the
registry data of registered taxpayers;
34.8.2.4. issuance of relevant information to registered taxpayers.
34.8.3. The relevant executive authority provides the maintenance of the
databank of the uniform state registry of taxpayers, its safeguard and
security, provides extracts from the uniform state registry of the taxpayers
as a response to official enquiries in the orde r, established under this
Code.
34.9. Unless otherwise stipulated by legislation, information on taxpayer from the
moment of its registration shall be confidential tax information.
34.10. Organizations – tax agents, not registered as taxpayers, shall be reg istered
with tax authorities at the place of residence in accordance with procedure
stipulated by this article. ( 6, 9, 11, 21
)
Article 35. Obligations of banks connected with registration of taxpayers
35.1. Legal entities, as well as representations and affiliates of foreign non –
commercial legal entities, which are state registered by tax authorities, shall
submit to tax authority the application for opening of bank account along with
application for state registration or at any time upon registration, and other
taxpayers – upon obtaining of certificate of registration. The tax authority on the
basis of this application issues to the taxpayer no later than within 2 days the
duplicate certificate. The number of duplicate certificates issued to the taxpayer is
not limited and each of them is numbers. The application form submitted by the
taxpayer for obtaining of duplicate certificate, and form of duplicate certificate is
approved by relevant executive authority. Certificate -duplicate for the purpose of
opening bank account shall be given within the term established by this article, in
case if a taxpayer has no debt on taxes, interests and financial sanctions to the
budget.

Upon issuance to taxpayer of the duplicate certificate as per paragraph one of
this Article, the tax authority shall within 1 day submit to the relevant executive
authority via electronic and/or paper carriers the information in the form set by
the relevant executive authority.
35.2. Banks open (except for cases of opening of the accounts which are not
connected with business activity for the non- resident) bank accounts for legal
entities, their branches and representative offices, individual entrepr eneurs only
upon submission of the certificate duplicate, issued by the tax authority.
35.3. If the duplicate certificate was not used for opening an account within 10
days from the date of issuance it shall be deemed as invalid.
35.4. The duplicate certif icate comprised of two parts. One part is remained in the
bank, in which the taxpayer has opened an account, and part, called the
В«notificationВ», banking authority, upon making of relevant markings shall send
to issuing tax authority.
Upon obtaining from the banking institution of notification, specified in this
Article, the tax authority shall insert the data in the notification into tax
registration database and within 1 day shall submit this information to relevant
executive authority via electronic an d/or paper carriers.
35.5. Duplicate certificate allow opening of accounts only in the bank (branch of
bank) specified on them.
35.6. If within 10 days В«notificationВ» of the duplicate certificate is not returned
by the banking entity, the tax authority shall clarify the reason of it with the
taxpayer and relevant banking entity. If duplicate certificate is not used within 10
days , the issued duplicate certificate shall be re -called and on the basis of official
information from the bank that account was not opened, the relevant record is
made in the registration data of the taxpayer on considering it invalid. ( 9, 11, 14
,
21 )
Article 36. Tax inspections
36.1. Inspections conducted by tax authorities can be on- site and off-site
inspections.
36.2. During tax inspections tax authorities and t heir officials shall clarify all
circumstances that can be importan t for making of right decision including the
circumstances in taxpayer’s favor.
36.3. On site tax inspection shall cover the period of no more than 3 calendar
years in taxpayer activities for taxes on profit, income, property, road and land.

On other taxes- the taxpayer activities for the period of no more than 3 years,
including the year of inspection.
If during the performance of tax inspection tax authorities have documented
evidences in the necessity of receiving the information on the taxpayer which is
connected with other persons and is relevant to the inspection, tax authorities may
require such persons to provide documents related with inspected taxpayer’s
activity. For such actions the motivated decision of tax authority is necessary.
36.4. It i s not allowed to tax authorities to have on- site inspections on the same
taxes, paid or to be paid by the taxpayer for already checked tax period with
exception of cases when such inspection is conducted in connection with
liquidation of legal taxpayer per son or application of physical entity, carrying out
business activity without establishment of the legal entity concerning termination
of entrepreneur activity, and in cases stipulated by Article 38.3. of this Code.
36.5. Taxpayers who disagree with the re sults of tax inspection may ask for the
out of turn inspection. In such case the additional tax inspection shall not be
conducted by the officials of tax authority who had conducted the previous
inspection.
36.6. Taxpayers hold the right to apply to courts for the reasons of inspections
conducted by tax authorities.( 3, 6, 21
)
Article 37. Off -site tax inspection
37.1. An off -site tax inspection shall be carried out without site visits on the basis
of documents in the possession of the tax authorities, provided by taxpayer as well
as other documents that reflect the calculation and payment of taxes, and
documents on taxpayer’s activity.
37.2. Off -site tax inspection shall be conducted within 30 days from the date
when documents providing basis for tax calculation and payment are provided by
the taxpayer.
37.3. If unmatched or mistaken information is found in documents submitted to
tax authorities for implementation of desktop inspection, tax authority shall be
entitled to enquire the taxpayer to submit additional information, documents and
explanations.
37.4. If incorrect tax calculation in tax declaration is found during desktop
inspection (increased of decreased amount of tax) notification shall be sent by tax
authorities to the taxpayer within 5- day period in accordance with form
established by the relevant state executive authority. The notification shall include
reasons of calculation and taxpayer’s right to appeal in accordance with
Article 62 of this Code.

If tax declaration required for implementation of desktop inspection was not
submitted for good reasons within timeframe stipulated by this Code, taxes are
calculated in accordance with Article 67 of this Code.
37.5. Until application from the taxpayer is submitted in accordance with Article
15.1.13 of this Code on implementation of new chronometer inspection, the
results of last chronometer inspection can be taken as basis for calculation of
taxes.
37.6. If during the off -site tax inspection the tax authority does not follow the
rules establish ed in articles 37.3. and 37.4. of this Code, the taxpayer holds the
right to remedy mistakes within 30 days (including the incorrect calculation of
taxes, reduction of tax amounts and other) that were allowed during the inspection
and can be established during desktop inspection, and within this time period the
taxpayer does not hold any responsibility (with exception of payment of interests)
for violations of tax legislation. ( 6, 9, 21
)
Article 38. On -site tax inspection
38.1. On- site tax inspection shall be conducted on the basis of decision by the tax
authority.
The on- site tax inspection can be planned or not planned.
The tax authority shall inform the taxpayer in writing about the planned tax
inspection not later than 15 days before the date of t he inspection.
38.2. The notification sent to the taxpayer shall include the information on reasons
and date of the inspection as well as rights and responsibilities of the taxpayer and
tax authorities.
Planned on- site tax inspection shall be conducted not more than one time in a year
and shall not continue for more than 30 days . In exceptional cases by the
resolution of supervising tax authority the timing for tax inspection can be
extended for the period of up to 90 days .
On the basis of justified decisio n of the higher tax authority the term of
preparation of the report on results of on- site tax inspection may be extended for
the period not more than 30 days in the following cases:
 when receiving the documents from the foreign state, required for
objective and full conducting of on- site tax inspection, including the reply
to inquiry of tax authority;
 when inspecting the articles taken as samples, conducting of expertise in
the course of on-site tax inspection or making the special conclusion with
use of various spheres of knowledge;

 when persons, sending the replies fail to forward the replies to inquiries in
due time, made by tax authorities in connection with on-site tax
inspection.
38.3. Not planned tax inspection shall be conducted in following cases :
38.3.1. If the last inspection of the taxpayer had indicated the situations of
not maintenance of reporting documents by the taxpayer or the
maintenance of such documents in inappropriate order, cases of evasion of
25 and more percents of taxable amounts ;
38.3.1. If tax return documents, necessary for tax calculation and payment
are not submitted in time or not submitted at all upon the warning of tax
authority;
38.3.2. if incorrect information is found in the report made on the results
of tax inspection.
38.3.3. When exceedingly paid amount of VAT, interest and financial
sanction is assigned for the payment of other taxes, interests and financial
sanctions or assigned as payments on future liabilities. In such case the
out of turn tax inspection can be conducted only on taxable VAT
operations of the taxpayer;
38.3.4. when application is submitted by the taxpayer to return
exceedingly paid amounts of tax, interests and financial sanctions;
38.3.5. when tax authority obtained information from known source on
hiding (decreasing) of incomes or object of taxation by the taxpayer in the
event that there exists information on tax violations by taxpayers
registered for VAT purposes in accordance with Article 157.2;
38.3.6. when in accordance with criminal legislation there is a decision of
the court or law -enforcement agency on implementation of tax inspection;
38.3.7. in case of failure to provide the documents, specified in article
42.4 of this Code, in due period stipulated by this article or provision of
doubtful or distorted information;
38.3.8. in the event of application for liquidation, reorganization of the
taxpayer legal entity or seizure of business operations of the natural
person, operating without formation of legal entity.
38.4. The on- site tax inspect ion shall be conducted at taxpayer’s business day
and business hours.

38.5. In the course of on-site tax inspection the inventory shall be performed
according to justified decision of the respective executive power body in the
following cases:
38.5.1. if in the course of last tax inspection the obvious non- keeping of
accounting records by the taxpayer was found ;
38.5.2. if in the course of last tax inspection, the obvious non- keeping of
accounting records by the taxpayer required according to legislation was
found and when arisen inaccuracies were not corrected after notification
of the tax authority, and the report was not prepared according to
stipulated regulations;
38.5.3. if in the course of on- site tax inspection of the taxpayer there were
found non- marked goods, liable to marking by excise marks;
38.6. Regulations of inventory performance in the course of on- site inspection will
be stipulated by the respective executive power body. (3, 6, 9, 14, 16, 21
)
Article 39. Documenting the resul ts of on-site tax inspection
39.1. An inspection report shall be prepared on the results of an inspection, such
report being signed by a responsible official of the tax agency and the manager
(person in charge) of the taxpayer. The taxpayer may include hi s comments in the
report, refuse to sign the report and these shall be registered in the report.
39.2. Inspection report shall include all violations of tax legislation and specific
articles of this Code as well as other legislative acts determined during the
inspection and proved by documents or absence of any violations.
39.3. The form of tax inspection report and requirements for its filling shall be
determined by the relevant executive authority.
39.4 One copy of the Tax inspection act shall be transfer red or sent to the
taxpayer (his authorized representative) in the manner allowing to confirm the
date of submission no later than within 5 days from the date of act.
39.5. The taxpayer holds the right, if he is not in agreement with the report of tax
inspection or any part thereof, within 30 days from the date of receipt of tax
inspection report to submit to relevant tax authority in writing the reasons for the
refusal to sign such report or his comments for the report or any of its parts. The
taxpayer hol ds the right to enclose to his written comments (objections) the copies
of documents that confirm the reasonability of such objections or motives for not
signing the inspection report and pass them to the tax authority.

39.6. No later than in 15 days upon the expiration of time specified in article 39.5.
of this Code the head of tax authority (his deputy) shall review the documents
provided by the taxpayer or collected from the taxpayer in accordance with
procedures stipulated by this Code, the tax inspection report, issues of non-
compliance with tax legislation and remedial activity on violation determined as
well as application of relevant sanctions (penalties).
39.7. If taxpayer provides written explanations or objections on the tax inspection
report the materials of inspection shall be reviewed in the presence of
taxpayer’s officials or individual entrepreneur and/or their representatives.
The tax authority shall inform the taxpayer on the venue and time of the tax
inspection materials revision. If taxp ayer, regardless of the advance notification
did not show up without excuse, then materials of inspection, including the
objections by the taxpayer, explanations, other documents and materials shall be
reviewed in his absence.( 6
)
Article 40. The access of officials of tax authorities to the areas and premises for the
performance of on -site tax inspection
40.1. The access of tax authority officials performing the on- site tax inspection on
the territory or premises (with exception of living premises) used by the taxpayer
for the performance of entrepreneurial activity shall be provided via submission
by such officials of their office identification documents, decision of the head of
tax authority (his deputy) on performance of on- site inspection or the court order.
40.2. The tax authority officials who perform the inspection shall not be entitled
to enter living accommodations (premises) without the consent of natural persons
who live there.
40.3. Should any obstruction be caused to the official of tax authority on getting
the access to the territory or premises (with exception of living
accommodations/premises) specified in article 40.1 of this Code the report shall
be made which shall be signed by officials conducting the survey and the
taxpayer. On the basis of this act the tax authority shall be entitled to define the
payable tax amounts in accordance with the procedures stipulated under Article
67 of this Code.
Should the taxpayer refuse to sign the report the relevant note shall be included
thereof. The copy of the report shall be submitted to the taxpayer.
40.4. Unlawful obstructions to the access of tax authority officials who perform
the on- site tax inspection to the territory of premises (with exception of living
buildings (areas)) used by the taxpayer for entrepreneurial activity shall be
considered as violation of tax legislation and involves the responsibility
established by legislation.( 9
)

Article 41. Revision 41.1. The tax authority official, who performs the on- site tax inspection for the
purposes on findings of all circumstances necessary for the integrity and fairness
of inspection, holds the right to revise the territories, premises as well as
documents of the taxpayer inspected.
41.2. The revision of territories, premises, documents and belongings without
performance of on -site tax inspection is not allowed except for the fo llowing
cases:
41.2.1. if documents or belongings were received by the tax official during
the previous inspection, or;
41.2.2. there is a consent of the owner of documents or belongings.
41.3. The revision shall be performed in the presence of witnesses.
41.1. During the revision the person inspected and/or his representatives as well
as experts may participate at the revision site.
41.5. Protocol shall be made upon the completion of the revision.
Article 42. Document inquiry
42.1. The tax authority offic ial, who performs the on-site tax inspection shall be
entitled in accordance with the procedure established by this Code to require from
the taxpayer to provide documents necessary.
The person, who was required to provide documents, shall submit such
docum ents to the tax authority within a period of five days.
42.2. Should the taxpayer fail to provide the tax inspection official with
documents required within timeframes specified in article 42.1. of this Code or
inform the tax official on the absence of suc h documents that act shall be made
who will be signed by the tax authority officials performing the inspection and the
taxpayer. Should the taxpayer refuse to sign this act the relevant note shall be
made thereof. The copy of this document shall be submitt ed to the taxpayer. If it
is not possible to receive required documents or their copies during the on -site
inspection from other sources, on the basis of above act the tax authority shall be
entitled to determine the amounts of taxes that shall be paid in accordance with
the procedure stipulated under Article 67 of this Code .
42.3. The refusal of the taxpayer to provide the documents required by the tax
officials performing the on -site inspection within timeframes stipulated in article
42.1. of this Code shall involve the responsibility established by the legislation. If

there is a refusal to provide documents in accordance with provisions of this
Article, the tax authority official performing the on-site tax inspection shall
collect the necessary documents in accordance with article 43 of this Code.
2.4 Documents required for performance of tax control and implementation of
enquiries made under international treaties to which the Azerbaijan Republic is a
signatory, or their appropriately approved copies on t he basis of enquiry of the
tax authority shall be submitted by the taxpayer within 20 days period. ( 15
)
Article 43. Withdrawal of documents and belongings for sampling purposes
43.1. The withdrawal of documents and belongings for sampling purposes shall
be allowed only during the on- site tax inspection.
43.2. If during the on- site tax inspection revision of documents presented for the
purposes of taxation by the taxpaye r shall require more time as well as if any
violations to the tax legislation are determined in submitted documents or if
specified violations are connected with belongings the tax authority official
performing the on- site inspection shall have the right to withdraw documents and
belongings provided to him in accordance with Article 42 of this Code. The
withdrawal of documents and belongings for sampling purposes by the tax
authority official performing the on- site tax inspection shall be based on the
motiv ated decision of the head of tax authority (his deputy).
The volume, quantity, timing of withdrawal and procedure for revision shall be
established in accordance with this Article .
43.2.1. During the on- site inspection items are taken as samples for
follow ing purposes:
43.2.1.1. inspections for compliance of the value of goods (works
and services), assigned for costs, deducted from income, its
physical and quality indicators, origin and other indicators;
43.2.1.2. inspection of compliance of profits obtaine d from
provision of goods (works, services) and registered physical and
quality indicators of these goods (works, services), type, origin and
other indicators;
43.2.1.3. determination of market values of these goods (works,
services);
43.2.1.4. evidences of violation of tax legislation, including
storage, sell and imports of excise goods, not marked by excise
labels or marked by forged excise labels;

43.2.1.5. other cases required for taking of items as samples for
evidencing the violations of tax legislation.
43.2.2. In cases and under purposes stipulated by Article 43.2 of this
Code, the tax authority representatives conducting the inspection, shall
inform in writing the head of the tax authority or his deputy on taking of
sample items at the same day.
43.2.3. The information of the officer of tax authority, implementing on-
site tax inspection, motivating the inventory of items for sampling, shall be
reviewed by the head (deputy) of the tax authority and only after this
decision on inventory of items for sampling can be taken.
43.2.4. The form of decision on taking of items for sampling during the on-
site tax inspection shall be approved by the relevant executive authority.
43.2.5. Items, confiscated as samples during on- site tax inspection,
dependent of the ir properties shall be packed by the tax offices and if
required they shall be locked by the inspector.
43.2.6. Size, volume of inventory of items for sampling during
implementation of on- site tax inspection as well as other conditions in
connection with i nventories shall be defined by codes and standards,
existing on the territory of the Azerbaijan Republic.
43.2.7. Items confiscated as samples can be taken for the period of no
more than 30 days, considering the time required for studies of these
items.
43.2.8. Storage of items taken as samples and their preservation, their
study by organizations established and performing in accordance with
legislation at the expense of the tax authority.
43.2.9. In cases when items confiscated as samples did not lost thei r
consumer properties, they shall be returned to the taxpayer. But if
products confiscated as samples have lost the consumer properties they
shall be compensated by the tax authority.
43.3. Copies of documents verified by the taxpayer to be taken.
43.4. It is not allowed to withdraw documents at nighttime (from 20:00 P.M. to
8:00 A.M.).
43.5. It is not allowed to withdraw the documents and belongings that are not
necessary for tax calculation during the on- site inspection.

43.6. The withdraw of documents and belongings as samples shall be done in the
presence of persons and/or their representatives from whom documents and
belongings are being withdrawn and witnesses. When necessary, expert can be
invited to participate during the withdrawal of documents and belongings.
43.7. The tax authority official before withdrawal of documents shall present the
motivated decision of the head tax authority (his deputy) on withdraw, as well
explains to participating persons their rights and responsibilities.
43.8. The prot ocol shall be made on withdraw of documents and belongings for
sampling purposes with consideration of requirements of article 48 of this Code.
43.9. The copy of the protocol on withdrawal of documents and belongings for
sampling purposes shall be issued t o the person from whom the documents and
belongings were withdrawn for sampling purposes. It shall be mentioned in the
protocol and confirmed by the signature of person from whom documents and
belongings were withdrawn.
43.10. In cases, when the taxpayer during the on- site tax inspection does not
provide documents and items for sampling, the refusal acts is made in accordance
with the form, approved by relevant executive authority, which is signed by the
tax officer, other persons participating in inspection (witnesses, experts,
specialists) as well as the taxpayer or his representative.
43.11. Should the taxpayer fail to provide documents and belongings for sampling
purposes in accordance with procedure established in this Code the withdrawn
shall be made b y the court order based on the motivated appeal of the tax
authority performing the on- site tax inspection. (6, 9
)
Article 44. Expert analysis
44.1. When necessary expert may be invited to participate in on- site tax
inspection.
The expert analysis shall be appointed if necessary skills are required, to clarify
issues.
44.2. Issues laid upon the expert and his conclus ions shall not exceed the
expert’s special skills.
Expert shall be invited on contractual basis. The contract may stipulate rights and
responsibilities of parties, issues laid upon the expert, expert’s responsibility
for erroneous or false conclusion a nd other issues stipulated by civil legislation.
44.3. The expert analysis shall be appointed by the decision of tax authority
performing the tax inspection.

The decision shall include the reasons for the appointment of expert analysis, last
name, name and middle name of the expert or name of organization that conducts
the expert analysis, issues laid upon the expert and materials to be provided to the
expert.
44.4. The expert holds the right to review inspection materials provided to him
and apply for the provision of additional materials.
44.5. The expert may refuse to provide the expert conclusion if materials provided
to him are not sufficient and if he does not hold special skills to conduct the
expert analysis.
44.6. The authorized representative of the tax authority who made the decision on
appointment of the expert analysis shall advice about such decision the taxpayer
who is going to be checked and explain to him his rights stipulated in article 44.7.
of this Code.
44.7. During the appointment and conduct of expert analysis the inspected person
holds the right:
44.7.1. to cancel the appointment of certain expert;
44.7.2. apply for the appointment of experts from the persons he indicates;
44.7.3. to provide additional issues to get expert opinion of the expert on
such issues;
44.7.4. to participate directly or via authorized representative during the
expert analysis by providing the advance notice to the tax authority
official performing the tax inspection;
44.7.5. to review the expert conclusion.
44.8. The expert shall provide conclusion on his behalf and sign this conclusion.
In the conclusion the expert describes surveys that he had conducted, his opinion
and answers to the questions that were laid. If during the expert analysis the
expert will determine circumstances that were not laid upon him he shall have the
right to include his opinion on such circumstances into his expert conclusion.
44.9. Copy of conclusion or his notification on the impossibility to provide such
conclusion shall be issued to t he person inspected who holds the right to give his
explanations and state his objections, as well as to ask to raise additional issues to
the expert and appointment of additional analysis.

44.10. The additional expertise shall be appointed in the case if the expert
conclusion is not clear enough or complete and this expert analysis shall be
assigned to the same or other expert.
The expert analysis shall be repeated if the conclusion of expert is not reasonable
and there are some suspicion for its accuracy. The analysis in such case shall be
assigned to another expert.
The additional and repeated expert analysis shall be assigned in the order
established by this article.
44.11. Should claim of the inspected party on rights stipulated under Articles 44.7
and 44.9 of this Code be declined, head (deputy) of the tax authority shall make
the motivated decision indicating reasons for declining the claim and submits the
copy of decision to inspected party. ( 6
)
Article 45. Invitation of specialist to provide assistance in tax inspection
45.1. The specialist can be invited by the decision of the head of tax authority (his
deputy) when the performance of on -site tax inspection will r equire special
knowledge and experience in areas that are not linked with the area of expertise of
the tax authority.
45.2. The specialist shall have special knowledge and experience and shall not
have any interests in the results of case. The conclusion of specialist that does not
comply with these requirements shall not be used by tax authority.
45.3. Specialist shall be invited on contractual basis. The contract may stipulate
rights and responsibilities of parties, issues laid upon the specialist,
specialist’s responsibility for erroneous or false conclusion and other issues
stipulated by civil legislation.
45.4. Specialist invited in accordance with article 45.1. of this Code shall provide
the conclusion on issues laid upon him. The specialist conclusi on shall be made in
writing, signed by him and attached to the on- site tax inspection report.
45.5. If taxpayer does not agree with the conclusion of specialist attached to the
inspection report he may make relevant comments in the report.
45.6. The compensation for losses caused to the tax authority or the taxpayer as
the result of wrong or false conclusion shall be considered in accordance with
civil legislation.
Article 46. Participation of translator

46.1. When necessary the translator may be invited for on-site tax inspection. The
invitation of translator shall be done based on the decision of the head of tax
authority (his deputy).
46.2. Translator shall be the person who doe not have any interest in the outcome
of the case and knows languages he needs to translate from and into. This
provision shall also be true for person who understands the deaf and dumb signs
of physical persons.
46.3. Translator shall be invited on contractual basis. The contract may stipulate
rights and responsibilities of partie s, translator’s responsibility for erroneous
or false conclusion and other issues stipulated by civil legislation.
Article 47. Participation of witnesses
47.1. During the on- site tax inspection witnesses may be invited in cases
stipulated by this Code.
47.2. The number of witnesses invited shall not be less than two people.
47.3. Only physical persons who do not have any interests in the outcome of case
shall be invited as witnesses.
47.4. Tax authority officials can not be invited as witnesses.
Witnesse s shall confirm in protocol the fact, content and results of actions taken
in their presence.
If necessary, witnesses can give their explanations to specified actions.
The same person can not be invited by tax authorities as a witness for more than
once in a tax year.
Article 48. General requirements to the protocol made during the actions on tax
inspection
48.1. In cases stipulated by this Code protocols shall be made during the tax
inspection. Protocols are made on azeri language.
48.2. The protocol shal l include the following:
48.2.1. name of the protocol;
48.2.2. venue and the date of action;
48.2.2. the time of action start and completion;

48.2.3. position and name of the person who made the protocol;
48.2.4. The name of the person involved in the acti on or participating
during the action, and when necessary – his address, citizenship,
information on his knowledge of Azeri language;
48.2.6. the content of action, the order of its execution;
48.2.7. facts and circumstance clarified during the implementati on of
action;
48.2.8. if samples of goods are withdrawn for sampling purposes in
accordance with this Code the protocol shall include the quantity, volume
and other specific characteristics of such goods.
48.3. The protocol shall be read by all persons who participated in the action.
Specified persons shall have the right to make comments that shall be included in
the protocol and attached to the case.
48.4 The protocol shall be signed by the tax authority official who developed it as
well as all other pers ons who participated in the action.
Article 49. Making the decision based on the results of tax inspection materials
revision 49.1. Based on the revision of tax inspection materials the head of the tax
authority (deputy head) shall make one of the followi ng decisions within 10 days:
49.1.1. on calling the taxpayer to account for violation of tax legislation;
49.1.2. on refusal to call the taxpayer to account for violation of tax
legislation;
49.1.3. on additional measures for inspection.
49.2. The decision on calling the taxpayer to account for violation of tax
legislation shall contain the circumstances of the taxpayer’s violation of tax
legislation, documents and other information that confirm the indicated
circumstances, explanations of the taxpayer an d results of revision of such
explanations, with indication of articles of relevant laws that stipulate the applied
measures of responsibility for tax legislation violation. The specific violations of
tax legislation for which the taxpayer is being called to account shall be explained
to the taxpayer.
49.3. On the basis of decision on calling the taxpayer to account for violation of
tax legislation no later than 10 days the taxpayer shall be sent the request on

payment underpaid taxes, interests, amounts of financial sanctions, administrative
penalties as well as the remedial of indicated violations.
49.4. The copy of the decision of tax authority and requirement shall be issued to
the taxpayer or his representative with registration of the date of receive. When
due to the deliberate actions of the taxpayer or his representative the copy of the
tax authority decision and/or request can not be issued, documents shall be
deemed issued from the moment from the date they are received by registered
mail.
49.5. The failure of tax authority officials to comply with requirements of this
article may provide the basis for cancellation of the tax authority’s decision
by the supervising tax authority or the court.
49.6. On tax violations determined for which the taxpaye r to be called to
administrative account the authorized tax official, who conducts the inspection
shall create a separate protocol on administrative violation. The revision of cases
on such violations and application of administrative sanctions to taxpayer ’s
officials and individual entrepreneurs shall be conducted by tax authorities
pursuant with the Code of the Azerbaijan Republic for Administrative Offences.
49.7. The provisions of this article shall also be applicable to tax agents. (3, 5, 21)
Article 50 Operative tax control
50.1. The operative tax control is the form of tax control implemented in stores
used for generation of incomes for legal entities and natural persons engaged in
entrepreneur activities, in trading and similar premises (territori es) (with
exception of residential premises (areas) and transportation means (with
exception of personal transportation not used for entrepreneur activities), having
the following purposes:
50.1.1. Recognition of taxpayers, not registered by tax authoritie s, in
cases and in accordance with procedures defined by this Code or
taxpayers who did not receive the В«Dot MarkВ» in accordance with
Article 221.4.7 of this Code;
50.1.2. Recognition of facts of sale, storage for sale or transportation from
the manufact uring facility of excise goods, not marked by excise labels or
marked with forged excise labels.
50.1.3. Compliance of rules on payments with population;
50.1.4. Recognition of facts of acceptance of foreign currency as means of
payment and purchase and sale or exchange of currency values at

commercial, catering and service establishments with violation of rules
established by legislation;
50.1.5. Compliance with the rules on collection of once paid duties;
50.1.6. Recognition of persons engaged in activities requiring special
permit (license) without such permit (license);
50.1.7.Rrecognition of attraction of natural persons to work (provision of
services) by the employer without making of employment contract in
accordance with procedures stipulated under t he Labor Code of the
Azerbaijan Republic;
50.1.8.Iimplementation of inspection by time -keeping method in
accordance with Article 23.1.3 of this Code.
50.2. Following shall serve as basis for operative tax control:
50.2.1. facts, established during the on- site tax inspection implemented by
the tax authority;
50.2.2. information obtained from sources known by tax authorities;
50.2.3. if the taxpayer did not follow the requirements of the tax authority
on prevention of violations of tax legislation within the timeframe
established by this Code;
50.2.4. If tax authorities had sufficient facts on violation of legislation on
issues stipulated under Article 50.1 of this Code by legal entities and
natural persons.
50.3. Operative tax control is implemented on the basis of motivated decision of
the tax authority. Such decision shall indicate the territory of taxpayer location,
as well as issue (issues) covered by the operative tax control, term of operative
tax control and officer (officers) of the tax authority performing the operative tax
control.
50.4. The operative tax control starts without preliminary notification to the
taxpayer and implemented in actual business hours. The officer of the tax
authority, implementing operative tax control, upon the start of contr ol shall
immediately submit the decision of the tax authority to the taxpayers, as per
Article 50.3 of this Code.
50.5.Officers of the tax authority implementing operative tax control within their
competence shall implement the access to the territory or p remises of the taxpayer
(with exception of living premises (areas), inspection of territories and premises

(with exception of living premises), as well as review of the documents and items,
require the submission of documents, inventory of documents and items for
sampling, attraction of experts, specialists, translators and observers as well as
enlistment of excise goods, not marked by excise label or marked by forged excise
label, in accordance with procedures stipulated by this Code.
50.6. By the results of operative tax control, tax authority officers shall make the
act in accordance with the form defined by the relevant executive authority.
Documentation of the results of operative tax control and review of the materials
of the operative tax control is i mplemented in accordance with procedures
stipulated under Articles 39 and 49 of this Code.
50.7. If by the results of the operative x control the taxpayer is attracted to
administrative liability in accordance with Code of the Azerbaijan Republic on
administrative violations, separate protocol shall be made on administrative
violation. Review of cases on violations and application of administrative
punishments towards the responsible taxpayer – its officer and the taxpayer –
individual entrepreneur shall be m ade in accordance with Code of the Azerbaijan
Republic on Administrative Violations .
50.7. Taxpayers performing cash operations on the territory of the Azerbaijan
Republic shall perform such payments with use of cash registers in accordance
with procedures established by relevant executive authority.
50.8. Cash register receipts shall contain the following information:
 Taxpayer name;
 50.8.2.TIN;
 50.8.3.date and time of receipt printing;
 name and address of facility location;
 50.8.5.name, unit of measur ement, quantities of goods or services (works),
price per unit and total amount;
 50.8.6.quantities and number of receipts printed over the day;
 type and manufacturer’s number of cash register.(9, 11, 14, 15 )
Article 51 . Inadmissibility of causing the unlawful damage during the tax inspection
51.1. During the tax inspection it is inadmissible to cause any unlawful damage to
the taxpayer or property owned, use d or operated by him.
51.2. Losses caused as a result of unlawful actions of tax authorities of their
officials during the tax inspection shall be compensated to the taxpayer at the
complete volume, including the missed profit (missed income).

51.3. Tax authorities and their officials shall be responsible for the damage caused
to the taxpayers in the result of unlawful actions, in accordance with existing
legislation.
51.4. Losses caused to the taxpayer by the lawful actions of tax authority officials
with exception of cases stipulated by legislation shall not be compensated. ( 9
)
Article 52. Financial sanctions procedure for violation of tax legislation
52.1. Upon the dec ision on attraction of the taxpayer to liability for violation of
the tax legislation, relevant tax authority, in accordance with procedures
established by the Article 65 of this Code, or via the court shall accept from liable
party all financial sanctions in accordance with this Code.
52.2. Claims on acceptance of financial sanctions by tax authorities are
considered in accordance with Civil Code of Practice of the Azerbaijan Republic.
52.3. The execution of the court decision on payment of financial sanct ions is
implemented in accordance with procedures stipulated under legislation. ( 9
)
Article 52. Consideration of cases in courts and execution of verdicts on application
of financial sanctions for violations of tax legislation
52.1. Cases on application of financial sanctions initiated by tax authorities shall
be proceed in accordance with Civil Process Code of the Azerbaijan Republic.
52.2. The execution of court verdict on financial sanctions entered into force shall
be provided in accordance with procedures established by the legislation.
Chapter V. Responsibility for violation of tax legislation
Article 53. General basis of responsibility for violation of tax legislat ion
53.1. Taxpayers, tax agents and their representatives as well as tax authority
officials shall be responsible for violation of tax legislation in accordance with the
procedures set by this Code, Code of the Azerbaijan Republic for Administrative
Offen ces and other legislation of the Azerbaijan Republic.
For the violation of tax legislation financial sanctions and interests, established by
this Code shall be applied to the taxpayers and tax authorities.
53.2. No person can be called to account for the s ame action (lack of action)
involving violation of tax legislation twice.

53.3. Every taxpayer shall be deemed innocent in violation of tax legislation until
his guilt is proved in accordance with procedures of this Code or the verdict of
court entered int o force.
The taxpayer is not obliged to prove his innocence in violation of tax legislation.
The obligation for proving the circumstances confirming the fact of the violation
of tax legislation by the taxpayer shall be laid on the tax authorities.
Any unpr oved doubts in taxpayer’s guilt for violation of tax legislation shall
be interpreted in taxpayer’s favor.
The taxpayer shall hold the right to remedy mistakes during consideration of
taxable base, calculation and payment of tax.
Provisions of this art icle shall also be applied to tax agents.
53.4. During revision of circumstances of tax violations, factors like deliberate or
mistaken misconduct, the age of the person responsible for application of
administrative responsibility, presence of mitigating o r burdening circumstance
shall be established by this Code and provisions of Administrative Violation Code
of the Azerbaijan Republic.
53.5. When violation of tax legislation is connected with transportation of goods
through the customs borders of the Azer baijan Republic it shall be considered in
accordance with the procedure established by Customs Code of the Azerbaijan
Republic.
53.6. If the person has committed several violations of tax legislation, then
financial sanctions will be applied separately as per each violation.
53.7. If person to whom financial sanctions are applied for violation of tax
legislation did not have similar violations within 1 year from the date the sanction
was applied it shall be deemed as not penalized.
53.7 Drawing of the taxpayer or tax agent to liability for violation of tax
legislation does not release them from execution of responsibilities on taxes and
legal requirements of executives of tax authorities.
53.8. Unless otherwise is stipulated under International Treaties to w hich the
Azerbaijan Republic is a signatory, agreements on production sharing, main
export pipeline and other similar agreements, approved by the legislation,
bringing to administrative account of taxpayer official (officials) due to failure to
submit on t ime without valid reasons of tax reporting associated with such
activities in implemented in accordance with the Code on Administrative
Violations of the Azerbaijan Republic. ( 3, 6, 9, 11, 14
)

Article 54. Circumstances that exclude the calling to account for violation of tax
legislation
54.0. Person can not be called to account for violation of tax legislation if one of
the following is involved:
54.0.1. the absence of the event of violation related to the tax legislation;
54.0.2. the absence of the fault of the person in the violation related to the
tax legislation;
54.0.3. the natural person had conducted the violation related to the tax
legislation at the age that do not allow his attraction to account.
54.0.4. expiration of the date for calling to account for violation of tax
legislation.
Article 55. Circumstances that exclud e the guilt of the person for violation of tax
legislation
55.1. Following circumstance shall exclude the guilt of the person for violation of
tax legislation:
55.1.1. The violation of tax legislation as the result of natural disaster or
other emergency o r force majeure circumstances;
55.1.2. The violation of tax legislation by the taxpayer (natural person)
who at the moment of misconduct was not conscious (was not controlling
his actions) or did not manage his actions due to the ill condition;
55.1.3. exe cution by the taxpayer or tax agent of written instructions and
explanations provide by the tax authority or other authorized state
authority or their officials within their level of competence;
55.1.4. finding of lawful basis in taxpayer’s actions during re –
consideration of decisions of tax authorities;
55.1.5. the credit of overpaid amounts, including overpaid amount by tax
agents, for any taxes to balance the underpayments on other taxes;
55.1.6. the remedial by the taxpayer of any tax violations connected with
the erroneous calculation of taxes and failure to comply with tax liabilities
before the tax inspection.
55.2. In presence of circumstances established in article 55.1. of this Code the
person shall not hold the responsibility for violation connected with tax legislation

with exception of payment of interest in cases stipulated by article 55.1.6. of this
Code.
Article 56. The expiration of the date for calling to account for violation of tax
legislation and application of financial sanctions
56.1. The person can not be called to account for violation of tax legislation and
not tax liabilities may arise if the period of 3 years had passed from the date of the
tax violation.
56.2. Tax authorities may appeal to court in order to apply financial
sanctions not later than within 3 months from the moment of
determination the tax violation. ( 4, 9 )
Article 57. Financial sanctions for late submission of tax returns or declarations
57.1. To the taxpayer, who did not submit in timely manner the tax report or note
specified under Article 16.2 of this Code without valid reasons, on the basis of the
decision of the head (deputy) of the tax authority the financial sanction is applied
at the value of 40 manats.
57.2. Against the taxpayer, who has not provided the information stipulated under Article
89.3 of this Code, within timeframes established without any valid reasons, on the basis
of the decision of the head (deputy) of the tax authority shall be applied the financial
sanction at the amount of 100 manats. ( 6, 9, 16, 21
)
Arti cle 58 . Financial sanctions for decreasing taxes and other tax violations
58.1. If the taxpayer has reduced the amount of tax (including the tax at the
sources of payment), specified in the report, compared to the amount, which shall
be specified in the r eport, as well as if he did not submit the report and did evaded
from transfer of required amount of tax to the state budget, towards him the
financial sanction is applied at the rate of 50 percent of the reduced or evaded tax
amounts (except for additional tax amount, calculated as a result of cameral tax
audit).
58.2. For non- submission of application on tax registration within the period,
specified in Article 33.4 of this Code, or information on change of location or
residence within the period specified in Article 34.3, as well in the event of non-
submission of information on changes in other registration documents (requisites,
indicated in the application of taxpayer for registration), as well for
transportation of passengers and cargoes with automobile transport means
without the В«Dot MarkВ», stipulated under Article 221.4.7 of this Code, the
penalty is applied against the taxpayer at the amount of 40 manats.

58.3. Should the taxpayer violate the order of writing off funds from the account
stipulated under the Civil Code of the Azerbaijan Republic, from his cash desk,
from the date of issuance of the order to the bank or other credit entity on
payment to the state budget in accordance with procedures stipulated under
Article 65 of this Code, the financial sanctions shall be applied at the size of 50
percent of cost operations.
58.4. In the event that taxpayer’s VAT registration was mandatory in
accordance with Article 115 hereof, financial sanction amounting to 50 % of the
VAT amount to be paid by a taxpayer to the Budget for the whole period when a
taxpayer was engaged in a business activity without VAT registration shall apply
for the business activity carried out without VAT registration.
58.5. Financial sanction amounting to 100% of the amount of taxes shown on the
electronic tax invoice produced to a taxpayer shall apply f or submission of
electronic tax invoice on VAT, in the event that registration for VAT purposes in
accordance with Articles 157 and 158 did not come into effect or was cancelled.
58.6. For payment by the taxpayer referred to in article 175.8 of this Code, the amount of
VAT later than on the date of payment of the cost of goods (works and services) in
accordance with Article 175.1.3 of this Code, the taxpayer shall be subject to financial
sanctions amounting to 50 percent of unpaid VAT.
58.7. For violation of rules of carrying out of cash settlements, thus implementing
of cash settlements with population without use of cash registers or accountable
forms (without installation of cash registers, in case of lack of accountable forms
in the form established by the legislation or without cash payment), with use of
cash registers, which have not been registered by tax authorities or not complying
with technical requirements, without use of accountable forms established under
legislation, or with use of accountable forms, which do not comply with forms
approved as appropriate, non- issuance of receipts or other accountable forms to
be issued to the buyer, bank statements, to be issued to the customer by the bank
departments on currency exchange or issuance with indic ation of amount lower
than paid actually, rules of maintenance of registration of cash operations with
population in the event of temporary seizure of use of cash register the financial
sanctions shall be applied as follows:
58.6.1. if such violation occurred for the first time during the year— the
amount of 400 manats;
58.6.2. if such violation occurred for the second time during the year—
the amount of 800 manats;
58.6.3. if such violation occurred for the third or more times during the
year — the amount of 1200 manats.

58.8. For hiding of raw materials, semi-manufactured goods, finished products
and other valuables, as well as funds, at the size of more than 1000 manats or
their non- registration, the following financial sanctions shall apply to tax payer:
58.7.1. for the portion exceeding 1000 manats of total amount of these
valuables or funds, hidden or unregistered,— at the rate of 5 percent;
58.7.2. should such event reoccur during the year, for the portion
exceeding 1000 manats of total funds of these valuables and funds hidden
or unregistered,— at the rate of 10 percent.
58.9. In the event of introduced changes to indicators of control and measurement
devices, damaging of seals on process equipment during the period from
application of the se al until its removal, as per Article 194.2 of this Code, found
deviation in excise marking of products, incomplete registration, in inventory of
excise marks, as well as delivery of finished products outside of production area
with violation of Article 191 .2 of this Code the financial sanctions shall apply to
the taxpayer at the amount of 5000 manats.
58.10. For establishing conditions for hiding (reduction) of incomes of natural persons
via their involvement by employer to perform any works (services) with out execution of
the employment contracts, in accordance with Labor Code of the Azerbaijan Republic,
financial sanction is applied against the employer at the amount of 1000 manats for each
such person.
58.11. Against taxpayer the financial sanction shall be applied at the amount of 100
percent of funds paid to his business account in non- resident banks and other non-
resident credit entities without obtaining of the duplicate certificate from the tax
authority.( 3, 6, 9, 11, 14, 16
, 21)
Article 59. Interest on overdue debts and overpaid taxes
59.1. For failure to pay the tax or current tax payment in period stipulated by the
present Code, the interest at rate 0,1 % of the amount of tax or current tax
payment shall be withheld from the taxpayer or tax agent for each day of delay .
59.2. Interest rates established by article 59.1. of this Code shall be applied in
respect of overdue amounts of tax current tax payments for the whole period of
delay but not more than for 1 year. This interest shall be applied to delayed
payments of tax amounts, found during the inspection, from the date of payment
of such tax amounts to the taxpayer.
59.3. Where taxes are overpaid or the amount of tax not charged correctly, unless
otherwise stipulated by this Code, inte rest shall be paid to the taxpayer at the rate
of 0.1 percent of relevant amounts beginning from the date that an application on

the refund of the excess amount is placed up to the date that such amount is
refunded.
If overpaid amounts of tax are refunded to the taxpayer within 45 days from the
date of application interests shall not be paid to the taxpayer. ( 3, 9
, 11, 16)
Article 60. Financial sanctions applied to banks and other credit organizations
managing various types of banking activity
60.1. Following financial sanctions shall be applied to banks and institutions
managing various banking accounts:
60.1.1. For opening a current bank account, or other account, for a
physical or legal person involved in entrepreneurial activity in accordance
with this Code, in the absence of a duplicate certificate issued by the tax
authority in acc ordance with Article 35 of this Code has been issued to
such legal person, individual entrepreneur, branch and permanent
establishment by the relevant tax authority – the amount of 400 manats for
each account set;
60.1.2. For not executing a request of nat ural or legal persons involved in
entrepreneurial activity for payment of taxes from the resources available
in such taxpayer’s running or other accounts in national or foreign
currency, as well as instructions of tax authorities on deductions from
taxpa yers’ accounts, debts, interests and financial sanctions on
taxpayer taxes in the order of payment stipulated by the Civil Code – the
amount of 50 percent of the value of transactions made in violation of the
order of priority. Therewith the sum of appli ed financial sanction should
not exceed 50 percent of the amount specified in these payment orders or
instructions of the tax authority.
In the case of undoubted deduction of funds from the taxpayer’s currency
account the bank freezes on the currency account the funds at the value of 105
percent of the amount specified in the instructions at the rates established by the
Central Bank at the date of payment. The instruction shall be fulfilled upon
converting the currency funds of the taxpayer into manats.
60.1.3. For not execution of instructions of tax authorities on stopping the
operations on payment and other accounts of natural or legal persons
involved in entrepreneurial activity – at the amount of 10 percent of the
value of operations conducted on these accounts.
60.2. In cases stipulated in article 60.1.2. of this Code upon the submission of
relevant instructions to the banks and other credit institutions managing various
types of banking activity the interest shall not be charged from taxpayer effectiv e
from the date of such instruction..( 6, 9, 16, 21, 24
)

Article 61. The responsibility of tax authorities and their officials
61.1. Tax authorities and their officials shall hold the responsibility in accordance
with provisions of existing legislation for any losses caused to the taxpayers as the
result of their unlawful activities (decisions) or lack of action, as well as unlawful
activities (decisions) or lack of action of officials and other employees of
indicated authorities during execution of their duties.
61.2. Losses caused to the taxpayers as a result of activities (dec isions) or lack of
action indicated in article 61.1. of this Code shall be compensated on the basis of
court verdict.
Unless otherwise is stipulated by this Code, the amounts of overcharged tax
sanctions, interests and administrative penalties in the cases of absence of tax
debts shall be refunded or credited to future payments within 45 days from the
date of submission of relevant application by the taxpayer.
61.3. For any unlawful activities (decisions) or lack of action, as well as not
execution or inappropriate execution of their duties, officials and other employees
of tax authorities shall be called to account in accordance with existing
legislation.
Chapter VI. Appealing of decisions (acts) of tax authorities and
actions or lack of action of their off icials
Article 62. Procedure for appealing
62.1. Each taxpayer or any liable person shall have the right to object the
decisions (acts) of tax authorities, activities of lack of action of there officials.
62.2. Decisions (acts) of tax authorities, activit ies or lack of action of their
officials can be appealed at the supervising tax authority (supervising official)
and/or in court.
The submission of appeal to the supervising tax authority (supervising official)
does not exclude the right of simultaneous or subsequent submission of similar
appeal to the court.
62.3. The appeal to the supervising tax authority (supervising tax official) shall be
submitted within 3 months from the date when the taxpayer or any other liable
person had determined or was to deter mine the violation of his rights.
Should the taxpayer or other liable person miss the time period indicated in
paragraph 1 of this article for good reasons, this time period can be re -established
by supervising tax authority or supervising official of the tax authority.

Article 63. Revision of appeal by the tax authority 63.1. The appeal on the decision (act) of tax authority, activity or lack of action of
its officials shall be reviewed by the supervising tax authority or its official within
30 days from the date of receipt and a written respond should be sent to the
person, who submitted the complaint .
The person who submitted the appeal shall be informed on the decision in writing
within the period of 10 days.
63.2. When taxpayer does not agree with amount of tax calculated that he has to
pay he may without stopping the tax payment submit the lodge to the relevant
executive authority performing the tax control or the court.
The taxpayer holds the right not to pay financial sanction during the revision of
his lodge.
63.3. The appeal by the taxpayer of other liable person to the tax authority
(official) shall not stop the execution of action (decision) being appealed, with
exception of cases stipulated by paragraph 2 of article 63.2. of this Code.
If the dec ision (action) being appealed does not comply with legislation of the
Azerbaijan Republic, the tax authority (official) who reviews the appeal holds the
right to stop completely or partially the execution of such decision (action). The
decision on stopping the execution of such action (decision) shall be made by the
head of tax authority who took such action or by the supervising tax authority.
63.4. When the amounts of tax, interest or financial sanction are being appealed
and as a result of satisfaction s uch appeal the requirement for the payment of tax,
interest or financial sanction was completely or partially removed the taxpayer
shall be entitled to:
63.4.1. to receive compensation for erroneously charged amount in
accordance with article 61.2 of this Code;
63.4.2. to receive interests from these amounts in accordance with this
Code.
Article 64. The revision of court appeals
Lodges (appeals) on decisions (actions) of tax authorities, activities or lack of
action of their officials, which are submitted in the court, shall be reviewed in
accordance with procedure established by the Civil Process Code of the
Azerbaijan Republic.
Chapter VII. General provisions on tax payments

Article 65. The procedure on collection of tax debts 65.1. If the taxpayer did not implement the tax obligation within timeframe
specified by this Code, the tax authority shall send to the taxpayer the notification
on payment within 5 days of taxes, interests and applied financial sanctions,
calculated or re -calculated in accordance w ith this Code.
65.2. Should the taxpayer fail to pay calculated and re -calculated taxes, interests
and applied financial sanctions within the period indicated in the notification, the
tax authority shall give an instruction, being the executive (payment) document to
the bank or other crediting entity to deduct from taxpayer’s current or other
accounts in national or foreign currency tax debts and interests, applied financial
sanctions to the state budget.
Tax authority provides the write -off from the VAT deposit account to the state budget
only VAT tax debts. In the event of absence on the taxpayer’s VAT deposit account of
funds sufficient for the payment of tax debts on VAT, for the purposes of payment to state
budget of VAT debts, the relevant instruct ion can be issued on other accounts of such
person.
65.3. Should the taxpayer have monetary means on current or other accounts in
national or foreign currency the instruction of the tax authority shall be fulfilled
by the bank or other crediting organizat ion at the date when such instruction is
obtained.
65.4. Should the taxpayer not have any monetary means on current or other
accounts in national or foreign currency or monetary means are not sufficient to
cover tax debts and interests, payment of applied financial sanctions, the
instruction of the tax authority shall be kept by the bank or other crediting
organization and is fulfilled as monetary means are deposited on taxpayer’s
account.
65.5. Should the debts not be paid within 90 days from the date of obtaining of
instruction by the bank or other crediting organization and in the event when no
information on registration of property for coverage of debts is issued within next
5 banking days in accordance with this Code, the instruction is returned and can
not be applied again for the same debt.
In the event when bank or crediting organization have received notification from
the tax authority on issuance of decision to conduct the property inventory or on
refusal of the relevant executive authority to conduct the property inventory, as
stipulated in Article 89.15 of this Code, the instruction is left at force until the
taxpayer has fulfilled his tax obligations on this debt.
65.6. Instruction of tax authorities on payment to the state budget of tax debts and
interests, applied financial sanctions shall be implemented by the bank or other

crediting organization in accordance with order on payments stipulated by the
Civil Code of the Azerbaijan Republic.
65.7. If the instruction of tax authorities on deduction to the state budget of tax
debts and interests, applied financial sanctions is directed at taxpayer’s
currency bank account, the bank or crediting entity shall freeze funds in the
account in accordance with procedures stipulated in Article 60.1.2. of this Code,
providing the immediate notification to the taxpayer on this. Upon
implementation by the taxpayer of conversion operation, bank or crediting entity
shall fulfill the instruction of the tax authority.
65.8. If instruction of the tax authority on payment to the state budget of tax debts
and interests is issued to a number of banks or crediting entities, and tax debts
and interests are paid to the state budget from any current or other accounts in
national or foreign currency of the taxpayer, tax authority shall provide the
immediate recall of instructions issued to other banks or crediting entities.
65.9. Returning of exceeding funds paid to the state budget from current or other
accounts in national or foreign currencyof the taxpayer shall be implemented in
accordance with procedure established by Article 87 of this Code.( 6, 9, 14
, 21)
Article 66. Illegal income
If income, classified as illegal not to be confiscated in accordance with legislation
of the Azerbaijan Republic, illegality of such incomes s hall not affect its taxation.
Article 67. Procedure for determining the taxable base in certain cases
67.1. If the taxpayer without valid reason without 5 days from the date of warning
of the tax authority upon the timeframe, stipulated under this Code, did not
provide reporting data required for calculation of the tax, did not submit the
documents required for implementation of on- site inspection, did not allowed the
access to the territory or premises (except living premises (areas)), does not
maintain t he accounting at all or in accordance with established procedures, in
the event of destruction (loss) of accounting and reporting documents, as well as
if it is impossible to determine tax articles for any other reason, the tax authority
shall be entitled to calculate the tax amounts to be paid, using following matching
information:
67.1.1. tax declarations submitted by the taxpayer to the tax authority for
previous reporting periods;
67.1.2. official data on taxpayer income, including indirect incomes;

67.1.3. official data on taxpayers costs, including costs for purchasing of
goods (movable property and real estate), works and services for
individual consumption;
67.1.4. official data on tangible and intangible assets owned or used by
the taxpayer;
67.1.5. official data on physical capacity of produced and (or) provided
works (works, services) by the taxpayer;
67.1.6. official data on import and export operations of the taxpayer;
67.1.7. official data on funds located at taxpayer’s accounts,
including the data on movements of funds on banking accounts;
67.1.8. any other information, received by the tax authority from known
source.
67.2. Determination of the tax, which shall be subject to payment by the taxpayer,
is provided on the basis of similar informat ion, information held by tax
authorities about the taxpayer, engaged in entrepreneurship, similar activities of
the taxpayer with consideration of following indicators:
67.2.1. production of analogue on same kinds of products;
67.2.2. provision of analogue or same kinds of products, implementation
of works and provision of services;
67.2.3. territory of the activity.
67.3. If taxes are calculated on the basis of similar information and information
on same taxpayer, the tax amount is defined by multiplying of the amount of
income or costs, deducted from the taxpayer’s income, to the rate of the
specific weight of the tax within the reporting period in the income or costs
deducted from the income taxpayer, engaged in similar activities.
67.4. If similar information on the taxpayer can not be obtained, taxes are
calculated on the basis of registration and reporting information of the taxpayer,
engaged in similar activities.
67.5. If on the basis of similar information it is not possible to calculate the
income tax of natural persons, working on contract basis, or if the work of natural
persons is not documented, the tax authority calculates the amount of the income
tax on the basis of mean monthly wage along the country over previous year.

67.6. If in the tax authority for calculation of tax there are several sets of similar
information on the taxpayer, the tax is calculated on the basis of similar
information, providing basis for calculation of tax at the highest amount.
67.7. In calculation of the tax on the basis of similar information overpaid taxes,
interests and financial sanctions of the taxpayer are taken into consideration.
67.8. For taxpayers submitting to the tax authority the information on absence of
entrepreneur activities, property, land and taxable operations in accordance with
Article 16.2 of this Code, taxes are not calculated on the basis of similar
information.
67.9. Upon the submission of declarations on taxes calculated on the basis of
similar information, calculated taxes are re -calculated w ith consideration of
declarations.
67.10. Taxation on the basis of similar information is performed in accordance
with Article 65 of this Code.
67.11. If any operation is conducted between mutually connected persons, when
determining the taxable income gen erated by people not connected with each
other the tax authority may distribute incomes and costs between such persons.
67.12. If the person declares the receiving of amount which is not enough to cover
his personal needs including the payment of property fees, the tax authority shall
determine the income and taxes on the basis of costs incurred for previous
periods, including credits and debts.
67.13. In cases when for the purposes of taxation barter operations are considered
as sell of goods (works, servi ces) at market prices, relevant operations shall be
registered by electronic tax invoices.
When the amounts of barter operations in electronic electronic tax invoices are
reduced, the tax authority determines the taxable base with consideration of
market p rices, calculates the amount of tax and applies sanctions stipulated for the
violation of tax legislation of the Azerbaijan Republic.( 9, 24
)
Article 68. Procedure on determining the time period
68.1. The duration of any period established by this Code shall start from the day
which follows the day of execution of legal activity of act ual event that stimulate
the counting of such period.
68.2. Any period shall expire at the end of the last day of the period stipulated by
this Code. If any period stipulated by this Code is a non- business day it shall be
postponed to the following busines s day.

Article 69. Exchange of foreign currency into manats If any taxable operation is implemented in foreign currency the exchange of such
currency into manats shall be conducted in accordance with the official exchange
rate of the Central Bank of Azerb aijan on the date of operation.( 24
)
Article 70. Correspondence with taxpayers
70.1. If the requirement of tax authority to the taxpayer or the requirement of the
taxpayer to the tax authority is not in writing or electronic format and was not
submitted by one party to another party, such requirements shall not have any
legal force for neither the tax authority nor taxpayer.
70.2. Any notification or other document sent by a tax agency to a taxpayer shall
be signed by the chief of that tax agency (deputy chief) and sealed. The
documents shall be considered to be served when they are delivered by registered
mail or in person to the address mentioned as a final address in t he documents on
official registration of a taxpayer – legal person or in the registration documents
of a taxpayer -physical person.
70.3. Documents on tax calculation or other documents developed in accordance
with tax legislation can not be considered as i nvalid or having any violations if:
70.3.1. their content complies with tax legislation and;
70.3.2. they indicate the recipient person or the person whose taxes are
calculated.( 14, 24
)
Article 71. Compiling and maintaining records by taxpayers
71.1. Any person shall be obliged to document any operation that:
71.1.1. entails a tax obligation for that person;
71.1.2. entails an obligation to withhold tax for that person; or
71.1.3. entails an obligation for that person to submit information.
71.2. Taxpayers shall be obliged to maintain records indicated in article 71.1. of
this Code in accordance with established procedure.
71.3. If a taxpayer’s documents have been drawn up in a foreign language,
tax authorities may require the translation of such documents into Azerbaijani.
Article 72. Submission and development of tax reports

72.1. For the purposes of this Code, a tax report shall consist of a tax declaration.
72.2. In accordance with the provisions of this Code and other legal normative
acts, taxpayers that are required to submit a tax report shall submit such tax report
to the relevant State tax authorities, within the term stipulated in this Code, in
accordance with the form and in the place determined by the relevant central
executive authorities.
Tax reports can be provided by the taxpayer personally or any other form
allowing c onfirmation of submission of the report (including submission or
sending in the form of electronic document in accordance with the respective
legislation to the post service).
Submission of tax reports in the form of electronic document shall be performed
in an order stipulated by the executive authority. Provisions of articles 72.3, 72.4,
72.6.3 and 72.6.4 of this Code shall not be applied to the taxpayers, filed the
documents in the form of electronic document.
72.3. A tax report shall be signed by the ta xpayer or his/its duly authorized
representative.
72.4. In accordance with legislation an independent auditor providing a taxpayer
with the service of preparing a tax report shall sign and seal the tax report and
indicate his Taxpayer’s ID. If such repor t is prepared by more than one
person, it shall be signed by the chief person.
72.5. If data in the reports for previous reporting period is varying from data on
initial control documents, with exception of cases stipulated under Article 163 of
this Code, taxpayers shall submit corrected report for subject reporting period. If
the amount of tax to be paid to the budget in accordance with corrected report
exceeds the tax amount to be paid in accordance with the report provided earlier,
the additional calculated amount shall be paid with interests accrued, and if such
amount is less -calculated amounts of tax or interests are decreased. Corrected
reports or reports not submitted in timely manner can be furnished by the
taxpayer before the date of decision on im plementation of on-site tax inspection.
72.6 Stipulating acceptance by a tax authority of a tax report after conducting its
office (cameral) inspection or any other actions shall be unallowable and shall
entail responsibility as provided by the legislation. Only in the following cases tax
report shall not be accepted by a tax authority, if:
72.6.1. Tax ID number of a taxpayer is not mentioned or mentioned
incorrectly;
72.6.2. The tax period is not reflected;

72.6.3. the tax report, submitted in the form of paper document is not
approved by a taxpayer-legal person with signatures and seal;
72.6.4. the tax report is not signed by a taxpayer -physical person;
72.6.5. if the tax report submitted in the form of electronic document by
taxpayers – legal and physical persons is not corresponding to the
requirements of respective legislation or regulations.
72.7. In the event that tax report submitted in accordance with this Code or other
legislative acts was not accepted in cases mentioned in Articles 72.6.1 – 72.6.5 of
this Code, the taxpayer shall, within 3 working days from the date of submission
of the tax report, be sent a notice of this, as well as of submission of the report to
the tax authority after having removed inaccuracies established.( 6, 14, 16, 18
)
Article 73. Submission of information on payments
A person who pays for any work performed or services rendered, or who makes
any other payments shall, if so required by legislation, submit information to State
tax authorities on such payments, as well as to the person that receives the
income.
Article 74. Extension of the term for submitting tax reports
74.1. If, before the end of the term for submitting reports, a taxpayer places a
request for the extension of the te rm for submitting a profit or income tax report
and pays the due tax in full amount, the term for submitting reports shall be
deemed to have been extended for up to three months. The extension of the term
pursuant to this Article shall not change the term for the payment of tax.
74.2. If the amount of tax as per the report exceeds the amount paid, the relevant
difference shall be paid to the budget along with interest calculated from the last
day of the tax payment term.
Article 75. Responsibilities of Bank s and other credit organizations, managing
various types of banking activities for taxpayers
75.0. Banks and institutions managing various banking accounts shall be obliged
to:
75.0.1. open a current or other accounts in national or foreign currency
for l egal entities and physical persons carrying out business activity
without establishment of legal entity , only upon the presentation of a
document provi ng that a taxpayer’s identification number has been
issued to such person by the relevant State tax authorities; advise State tax
authorities of such accounts opened by a taxpayer; and not carry out

operations on accounts unless bank documents reflect the taxpayer’s
identification number;
75.0.2. execute a request of legal entities and physical persons carrying
out business activity without establishment of legal entity for payment of
taxes from the resources available in such taxpayer’s current or ot her
accounts in national or foreign currency ;
75.0.3. to execute the instructions of tax authorities on freezing in
accordance with procedures established by the legislation of operations of
bank accounts of legal entities and physical persons carrying out business
activity without establishment of legal entity;
75.0.3. transfer tax amounts to the relevant budget (to another banking
institution providing a cash service to the bank or to the budget) on the
date that resources are written off from a current or other accounts in
national or foreign currency of legal entities and physical persons
carrying out business activity without establishment of legal entity .
(3, 6,
21)
Article 76. Provision of information by banks and other credit organizations
managing various banking activities
76.1. When the tax inspection had revealed the non- keeping of profit and loss
records by the taxpayer in an order stipulated by the legislation, liquidation (loss)
of accounting or reporting documents and also non- filing of the tax declarations
within fixed periods or taxpayer`s failure to provide the documents to tax
authorities in the course of conducting of tax inspection, failure to provide access
to tax authorities to the territories or premises (except for apartments) the tax
officials may obtain the information about the bank accounts and operations from
any bank who provides financial services to the legal or physical person by
written inq uiry in order to determine the tax obligations of the taxpayer. (3)

76.2. The authorized bank, upon receive of notification sent on the basis of
provisions of article 76.1. of this Code in accordance with procedure established
by the relevant executive authority shall within 5 days provide (deliver)
information requested in the notification of tax authorities to the legal person and
private entrepreneur . (3)

76.3. If within 15 days from the dispatch (delivery) of the official notification
from respective court to the legal entity and private entrepreneur, will not be
provided the notice of court on consideration of the application of legal entity and
private entrepreneur regarding the objection to provide the inquired information,
then relevant bank will send the information about accounts or operations of the
legal entity and private ent repreneur. In all other cases provision of the

information on the accounts or operations of the legal entity and private
entrepreneur is not allowed. (3)

76.4. It is not allowed to disclose (deliver) the information on accounts and
operations of the legal person and private entrepreneur , received in accordance
with provisions of this Article to other authorities or citizens. ( 6, 3)

Article 77. Tax obligation
77.1. A taxpayer’s obligation to pay tax when circumstances stipulated in this
Code (including current tax payments) arise shall be deemed its tax obligation.
77.2. Bases for the emergence, alteration and annulment of a tax obligation, as
well as rules and conditions for the fulfillment of a tax obligation shall be
determined exclusively under this Code.
77.3. Taxpayers shall be responsible for relevant tax obligations from the moment
that obligations to pay tax arise in accordance with the provisions of tax
legislatio n.
77.4. The tax obligation shall be completed in following cases:
77.4.1. with payment of taxes;
77.4.2. with appearance of circumstance connected completion of tax
obligation pursuant to tax legislation;
77.4.3. with death of the taxpayer or his recognit ion as dead in accordance
with civil legislation of the Azerbaijan Republic. The property tax debts of
the person who died or recognized as dead shall be compensated from and
within the amount of his property.
77.4.4. with liquidation of legal person – upon the calculation of budget
payments (payments to non- budgetary funds) by the liquidation
commission in accordance with this Code.
77.4.5. if the requirements of the taxpayer -debtor, liquidated due to
bankruptcy as established by the legislation of the Azer baijan Republic,
the repayment of which is refused according to court judgment, are
considered annulled.( 3, 16, 24
)
Article 78. Fulfillment of tax obligations
78.1. Fulfillment of tax obligations shall be the payment of payable tax amounts
within the established term. The fulfillment of tax liabilities is obligatory
regardless of the existence of funds on taxpayer’s accounts or any property.

78.2. Fulfillment of tax obligations shall be implemented in the order established
by this Code.
78.3. Fulf illment of tax obligations shall be effected directly by the taxpayer,
unless otherwise provided for in this Code
78.4. Fulfillment of tax obligations shall not be assigned to other persons.
Article 79. Fulfillment of tax obligations upon the liquidation o f an enterprise
(organization)
79.1. The tax obligations of a liquidated enterprise (organization) shall be fulfilled
by the liquidation commission at the expense of the enterprise’s
(organization’s) monetary resources, including income received from the sale
of its property. Unless otherwise provided for in this Article, the liquidation
commission shall also fulfill the tax obligations of the enterprise’s
(organization’s) branches, and separate divisions. The obligations of a branch
or separate division of the liquidated enterpr ise (organization) shall be fulfilled
directly by that enterprise, or, upon the liquidation of that enterprise, by the
liquidation commission of that enterprise.
79.2. If the liquidated enterprise’s (organization’s) monetary resources,
including resour ces received from the sale (for the purpose of the fulfillment of
tax obligations) of its property, are not sufficient for the complete fulfillment of
such enterprise’s (organization’s) tax obligations, the remaining debt on
the tax obligations shall b e paid by the founders of the enterprise, if, pursuant to
the law, regulations or other foundation documents, the enterprise’s founders
are jointly responsible for its obligations. The payment of debt obligations upon
the liquidation of a personal enterprise shall be the responsibility of the owner of
its property.
79.3. In the case of enterprise bankruptcy his obligations shall be fulfilled in order
established by the legislation.
Article 80. Fulfillment of tax obligations upon the reorganization of an e nterprise
(organization)
80.1. The tax obligations of a reorganized enterprise (organization) shall be
fulfilled by its newly appointed successor (successors) in accordance with this
article.
80.2. The fulfillment of a reorganized enterprise’s tax obligations (liabilities)
shall be vested in its successor (successors), whether or not such successor
(successors) is (are) aware of the factors or circumstances in the reorganized
enterprise’s non- fulfillment or improper fulfillment of its obligations before
the reorganization has been completed.

80.3. Reorganization of an enterprise shall not alter the term for payment of such
enterprise’s (organization’s) tax obligations by its successor
(successors).
80.4. An enterprise established as a result of a merger of several enterprises
(organizations) shall be considered the successor with respect to the tax
obligations of each of those enterprises (organizations).
80.5. If an enterprise (organizat ion) is split up into several enterprises
(organizations), the organizations (enterprises) established as a result of such
split- up shall be considered the successors with respect to the tax obligations of
the divided enterprise (organization).
80.6. When there are several enterprises, the share of each successor in the
fulfillment of a reorganized enterprise’s tax obligations shall be determined
according to the procedure established by the relevant central executive
authorities.
80.7. An enterprise esta blished as a result of altering an enterprise’s
organizational -legal status shall be considered the successor with respect to the
tax obligations of such reorganized enterprise.
If reorganization, when one or more enterprises (organizations) are split of f from
an enterprise (organization) is not directed in the non- fulfillment of the
reorganized enterprise’s tax obligations, the enterprises (organizations) so
split off shall not be successors with respect fulfilling the reorganized
enterprise’s (organization’s) tax obligations.
80.8. If one legal person is transformed into another the successor of the
reorganized legal person shall be a new legal person.
80.9. If one of number of legal persons are excluded from a legal entity the
reorganized legal en tity shall not be considered a successor for the purposes of
taxation, provided however that this is not directed to non compliance of tax
obligations of this reorganized legal person.
Article 81. Fulfillment of the tax obligations of deceased, incompetent or missing
physical persons
80.1. The tax obligations of a deceased, incompetent or missing physical person,
as well as related interests and sanctions, shall be fulfilled by his heir (heirs) or
successor (successors) within the limits of the value of the property and in
accordance with such heir’s (heirs’) or successor’s
(successors’) share in that property as of the day that the inheritance was
received.

80.2. Where there is no heir (heirs) or successor (successors), the deceased
person’s tax liabilities and related interests and sanctions shall be written off
(annulled).
80.3. The tax liabilities of a physical person who is deemed, by a court decision,
incompetent or missing shall be paid for by the guardian of that person at the
expense of th e relevant property.
80.4. If the property of a physical person who is duly considered incompetent or
missing is not sufficient to pay for all his tax liabilities, as well as interest and
fines, such interest and fines shall be debited by the relevant cent ral executive
authorities in the manner stipulated in Article 190 of this Code.
81.5. If the status of being incompetent or missing is terminated, by a decision,
with respect to a physical person, such person’s tax liabilities that were
written off before shall be re -established; no interest or fine shall, however, be
assessed for t he period starting from the date that the person began to be
considered incompetent or missing up to the date that the status of being
incompetent or missing was terminated.
Article 82. Procedure for calculation and payment of tax by the taxpayer
82.1. Unless otherwise provided for in tax legislation, a taxpayer shall
independently calculate the tax amount payable during a tax accounting period on
the basis of the taxable base, the tax rate and tax exemptions.
82.2. The calculation of taxes payable in cert ain cases stipulated in this Code or
other normative acts of tax legislation may be vested in a State tax agency or tax
agent.
82.3. Taxes shall be calculated in the manner established in this Code or other
normative acts of tax legislation with respect to the relevant tax.
82.4. A tax amount which is payable within an established term shall be paid
(transferred) by the taxpayer or person who is legally liable in cases established
by legislation. ( 6
)
Article 83. Calculation of taxes by tax authorities
83.1. Pursuant to this Code, assessment of a tax shall mean the entry of a tax
amount payable by a taxpayer for a specific tax period into the accounting records
of the Stat e tax service authorities. Re- assessment of already assessed tax amounts
by State tax authorities shall also be deemed the assessment of taxes.

83.2. State tax service authorities shall, pursuant to this Code, have the right to
assess the tax liability of each taxpayer according to one or more of the following
sources:
83.2.1. data contained in taxpayers’ tax declarations or returns;
83.2.2. information on payments pursuant to Article 73 of this Code;
83.2.3. audit materials
83.2.4. any other information known to tax authorities from known source,
including the similar data, stipulated under Article 67 of this Code .
83.3. The tax authority shall be entitled to re -calculate taxes, interests and
financial sanctions, calculated by results of on- site and desktop inspection, within
3 years upon the end of the reporting period in accordance with Article 85.4 of
this Code.
83.4. In the event that tax legislation does not require tax payment with the
submission of a declaration, as well as in cases when the State t ax authorities
consider a previous tax assessment to be erroneous, the tax authorities shall assess
tax and send, within 5 days a tax assessment notification to the taxpayer in
accordance with Article 84 of this Code. Tax authorities may, before the end of
the claim period stipulated in Article 85 of this Code, assess a tax amount or make
adjustments to a previously calculated tax amount.
83.5. In cases when this Code had established the payment of tax with submission
of tax return, the development of the r eturn reflecting tax payment application
shall be the notification on calculation and payment of such tax.
83.6. When during taxation in accordance with Articles 5.0.1, 212.4 or 221.4.1. of
this Code the taxpayer did not submit the tax return and the tax a uthority did not
calculate the payable tax amounts on the basis of other data pursuant to
procedures of this Code it is considered that the tax authority had calculated the
annual tax obligations of the taxpayer at the volume of tax withheld or paid from
t axable base received by the taxpayer within a year, and provided the notification
on tax calculation to the taxpayer.
83.7. If there is concrete information about a taxpayer’s intention to evade
taxes by violating jurisdiction, transferring fixed assets to another person or taking
other steps to prevent the withholding of a tax where taxes are not immediately
paid, the State authorities shall be entitled to assess tax before the date that it is
usually paid, provided that such action is necessary to ensur e withholding of the
tax.

83.8. The taxpayer may, on the basis of the following arguments, appeal to a court
against the assessment of a tax under the Article 83.7. for following reasons:
83.8.1. that the tax amount exceeds the amount that shall be paid ; or
83.8.2. that there is no reason for an early tax assessment.
83.9. When it is not possible to determine the profit of taxpayer such profit shall
be calculated in accordance with rules established by relevant authority. ( 6, 9
)
Article 84. Notification of the assessment of a tax
84.0. A taxpayer shall be served a notice about the asse ssment of a tax. Such a
notice shall indicate the following:
84.0.1. the taxpayer’s name or the name of the entity;
84.0.2. the Taxpayer’s ID;
84.0.3. the date of notification;
84.0.4. the object that the notification relates to and the tax year, or tax
years, covered by the notification;
84.0.5. the amount of t he estimated tax and interest;
84.0.6. a request for payment of the tax and the payment term;
84.0.7. the place and procedure for payment of the tax;
84.0.8. the factor (factors) on which the tax assessment was based;
84.0.9. the procedure for lodging a complaint.
Article 85. Terms of tax obligations fulfillment and alteration of such terms
85.1. Terms of tax payments shall be established with reference to each tax.
Alteration of specified terms of tax payment maybe admitted only in an order
stipulated by this Code.
85.2. Payment of taxes in violation of payment terms will be resulted in payment
of penalties (percents) by the taxpayer in an order and subject to provisions
stipulated by this Code.

85.3. Terms of tax payments shall be defined by the calendar date or expiration of
terms, calculated by years, quarters, months, decades, weeks and days and also by
the event which should arise or occur, or actions to be performed.
85.4. Tax authorities are entitled to calculate, recalculate taxes, penalties and
fin ancial sanctions of the taxpayer within 3years after termination of taxable
reporting period, to impose calculated (recalculated)sums of taxes, penalties and
financial sanctions within 5 years after termination of taxable reporting period.
85.5. A taxpayer has the right, within 3 years after the expiration of the tax report
period, to demand calculation of taxes, interests and financial sanctions
incorrectly deducted, and, within 5 years, demand re -calculation of the calculated
amount and return or replacem ent of the overpaid taxes, interests and financial
sanctions.
85.6. Terms of fulfillment of tax obligations may be extended for later periods,
than specified by this Code, in the following cases:
85.6.1. cause of damage to the taxpayer as a result of natur al disaster or
any other force -majeure circumstances. In this event the taxpayer shall
submit to the relevant tax authority the notes of the event occurred and the
amount of damage incurred;
85.6.2. threat of bankruptcy as a result of tax lump- sum payment by him.
In this case the taxpayer shall submit the notes on debts and credits on the
date of application with indication of the cash money, funds on current or
other accounts in national or foreign currency, surnames of debtors and
creditors, TIN.
85.7. Al teration of terms of tax payments shall not be resulted in annulment of
current obligation and establishment of new tax obligation.
85.8. Terms of fulfillment of tax obligations cannot be extended if criminal
proceedings regarding violation of tax legislat ion is instituted against the
taxpayer.
85.9. Extension of the terms of tax obligation fulfillment shall be granted on the
basis of justified written application of the taxpayer submitted to tax authority,
specifying that such extension will be ensured by the taxpayer by respective
guarantee or surety. Application shall be submitted before the payment period,
established by the type (types) of tax for the relevant reporting period. Relevant
tax authority shall review the application within 30 days and if re quired, decision
is taken for extension period.

85.10. In the presence of grounds, stipulated by the article 85.6 of this Code, the
terms of fulfillment of tax obligations may be extended for the period 1-9 months
within tax year. A taxpayer shall not be c alculated interests for that period.
85.11. The decision of respective executive power body on extension of
fulfillment of tax obligation shall specify the reference to the amount of tax debt,
type (type) of taxes, terms of payment to be extended, terms an d procedure of
payment, imposed penalties and also notes about guarantee or surety.
In the event of staged implementation of tax liability within periods stipulated
under Article 85.10 of this Code, the decision of tax authorities on extension of
the period for implementation of tax liability shall include the procedure on
staged implementation of tax liability
85.12. The decision about extension of terms of tax obligation fulfillment will be
effective from the day specified in this decision.
85.13. Conside ration of the invalidity of contract in accordance with procedures
stipulated under legislation does not mean the cancellation of the tax obligations
of the taxpayerВ».
85.14. The extended period for execution of the tax obligation is cancelled before
the expiry in following events:
85.14.1. in advance execution tax obligations by the taxpayer;
85.14.2. in cases stipulated in Article 85.8 of this Code;
85.14.3. non- compliance with provisions of the decision of tax authority
on extension of the tax obligation execution period.
85.15. In cases stipulated under Article 85.14 of this Code, the tax authority,
which has taken the decision on termination of the extended period for tax
obligation execution, shall inform the taxpayer about it within 5 days. The
taxpayer within 30 days from the date of receiving of information shall make the
payment of debts and interest accrued to the amount until the date of payment
within 30 days.
85.16. The relevant tax authority shall each quarter (periodically) inform the
relevan t executive authority on the amount of tax obligations, the period of which
is extended. ( 6, 9, 14
, 21)
Article 86. Places where taxes are paid
86.0. Taxes shall be paid at the following places:

86.0.1. the place indicated in the notice; or
86.0.2. at place of registration of the taxpayer – unless otherwise stipulated
by this Code ;
86.0.3. withholding taxes,— by tax agencies at the location of registration;
86.0.4. when no place is indicated in the relevant tax legislation, the place
of residence of the physical taxpayer, or the place of activity of a legal
taxpayer.( 6
, 21)
Article 87. Refund of overpaid taxes, interests and financial sanctions
87.1. Where tax, interest or financial sanction is paid in excess of the assessed tax
amount, with exception of administrative penalties such overpayments shall be:
87.1.1. shall be accounted at the balance of other taxes, interests,
financial sanctions and administrative penalties;
87.1.2. credited, with the taxpayer’s agreement, such excess amount
against the taxpayer’s future tax liabilities;
87.2. If an excess tax amount, interest or financial sanctions paid by a taxpayer is
credited against his/its other tax liabilities, on t heir request a taxpayer is issued
the extract from the file and revision protocol, as well as once in a quarter within
20 days until the quarter end he is sent the notification. Extract from the personal
sheet or verification act shall not be given for the period not covered by tax
inspection during preliminary investigation carried out by the respective
executive authority on cases related to offences provided by Article 213 and 213- 1
of the Criminal Code of the Azerbaijan Republic in accordance with Crimi nal
Procedure Code of the Azerbaijan Republic.
87.3. Unless otherwise provided for in this Code, refund such excess amount to
the taxpayer, upon the taxpayer submitting a written application, within 45 days.
87.4. Rules for the refund of overpaid taxes, i nterests and financial sanctions shall
be established by relevant executive authority.( 6, 11, 14
)
Article 88. Rules for the payment of tax arrears
88.0. Tax arrears payable to the Budget shall be paid in the following order:
88.0.1. the amount of t axes assessed, subsequently from the date of
formation;
88.0.2. the amount of interest assessed;

88.0.3. the amount of financial sanctions assessed. (9 )
Article 89. Seizure of property
89.1. In the event that a tax – payer did not fulfil his/her tax obligation within the
term provided by this Code, his/ her property may be recorded as a method to
ensure the payment of his/her tax burden, interests calculated on the tax bu rden in
connection with the non- fulfilment of the same obligation, and of applicable
financial sanctions.
Listing of state property, privatization of which is not allowed under the
legislation of the Azerbaijan Republic, as well as property of enterprises and
facilities, privatization of which is conducted under the decision of the relevant
state executive authority shall be implemented in order established by the relevant
state executive authority.
89.2. The seizure of property is the limitation of taxpaye r’s rights to his
property within which he can not mange the property and any use and ownership
over this property is performed under the control of the tax authority.
89.3. In the event of non- payment by the taxpayer of its debts on taxes, interests
and financial sanctions within terms specified in the notifications, as per Article
65.1 of this Code, the tax authority is entitled to demand from the taxpayer the
submission to the tax authority of information on assets in the form set by the
relevant execu tive authority. For delayed submission of information the taxpayer
shall be liable in accordance with provisions of this Code.
When the tax authority had enough reasons to think that the taxpayer evades from
execution of obligations on taxes , the tax authority sends the notification to the
taxpayer requesting the immediate payment of tax obligation.
When the taxpayer does not execute tax obligations as stipulated in paragraph 2 of
this article the tax authority on the basis of motivated decision can impleme nt the
seizure of taxpayer’s property.
The implementation of property seizure at night time (from 20:00 P.M. to 8:00
A.M.) shall not be allowed with exception of certain cases.
89.4. The seizure is implemented on the entire property of a legal person and for
natural person it shall exclude the property, which can not be seized in accordance
with legislation of the Azerbaijan Republic.
89.5. Only property shall be confiscated that is required and sufficient for
execution of tax obligation, calculated inter ests and applied financial sanctions
on tax debts due to non- fulfillment of this obligation. The property shall be
suitable for sell/marketable and retaining its commodity properties.

89.6. The seizure of property with consideration of article 89.5. of this Code shall
be implemented in following order:
 monetary means in cash;
 the property that does not participate directly in production of goods, for
example, securities, foreign currency, non -production premises, light
transport, design goods for office pr emises.
 manufactured goods, as well as other material valuables not involved
and/or not intended for direct production purposes;
 raw materials intended for production purposes as well as machinery,
equipment, buildings, facilities and other fixed assets;
 other property.
89.7. The seizure of property shall be implemented based on the resolution of the
chief of tax authority. The resolution shall indicate the name of the taxpayer and
address where the property is located.
89.8. The seizure of property sha ll be implemented by the tax authority in the
presence of taxpayer, witnesses and experts, if necessary.
The tax authority implementing the seizure of property does not hold the right to
refuse to the taxpayer (his authorized representative) to participate in property
seizure.
Persons who participate in seizure as witnesses, experts as well as the taxpayer
shall be made aware of their rights and responsibilities.
89.9. Tax authority officials who perform the seizure of property shall submit to
the taxpayer (his representative) the decision on seizure of property by the chief
of tax authority and documents confirming their authority.
89.10. During the seizure tax authority officials shall develop a protocol on
seizure of property, list of the property seized shall be attached to this protocol.
The seizure shall indicate the names, quantity, individual characteristics and if
possible the price of property. All goods to be seized shall be demonstrated to the
witnesses and the taxpayer (his representatives).
A ta xpayer shall be warned by a tax authority about his responsibility under the
legislation of the Azerbaijan Republic for the violation of limitations established
in Article 89.2 and 89.11 hereof with respect to his registered property.
89.11. Deals on seiz ed property made by the taxpayer through violation of
procedures established by this article shall be deemed as invalid.

89.12. The decision on seizure of property shall lose its force from the moment of
its cancellation in established order or execution of tax liability.
89.13. Inventory of excise goods, not marked by excise labels or marked with
forged excise labels, shall be implemented as follows:
89.13.1. Inventory of excise goods not marked with excise labels, or
marked with forged excise labels, is a limitation of the rights of the
taxpayer on these goods, under which the taxpayer does not hold the
rights on ownership, use, disposition of said products.
89.13.2. In the event of reveal of storage or sale of excise products not
marked with excise labels or marked with forged excise labels (food
alcohol, beer, all types of alcoholic beverages and tobacco products), the
total quantity, quantity of excide goods, not marked with excise marks or
marked with forged excise marks (food alcohol, beer, all types of alcoholic
beverages and tobacco products), shall be documented with act of
relevant form, approved by the relevant executive authority, indicating the
requisites of legal entities and natural person, engaged in entrepreneur
activities, as well as their a uthorized representatives, act is verified by
signatures of representatives of tax authority, as well as responsible
authority of the facility and witnesses. The taxpayer or his authorized
representative may write their comments on the act, refuse to sign the act
with relevant notes made on this act.
89.13.3. The list of excise goods, not marked with excise labels or marked
with forged excise labels (food alcohol, beer, all types of alcohol
beverages and tobacco products), in accordance with relevant form
approved by the relevant executive authority. The list contains the
information on name, distinguishing properties, origin, purchasing and
sell prices of these goods, name of the tax authority, first, middle and last
names of authorized officers, performing the listing, data and location of
listing, data on the taxpayer or his representative, information on
observers and invited experts.
89.13.4. Origin, purchasing and sell prices of excise goods, not marked by
excise labels or marked by forged excise labels (food alcohol, beer, all
types of alcoholic beverages and tobacco products) are determined by the
primary documents or explanatory note received from the management (or
in his absence -from seller).
89.13.5. On state official, involved in administrative vi olations, stipulated
by the Code of the Azerbaijan Republic on Administrative Violations,
protocol shall be made in accordance with specified Code.

89.13.6. Copies of made act, listings and protocols shall be passed to
official.
89.13.7. Representative of tax authority, implementing the listing of excise
goods, not marked with excise labels or marked with forged excise labels,
is not authorized to prohibit the taxpayer or his representative to
participate in listing the products.
89.13.8. Representative of tax authority, implementing the listing of excise
goods, not marked with excise labels or marked with forged excise labels,
within the listing process of these goods shall explain to the taxpayer or
his representative their rights and responsibilities.
89.14. The l eaving of listed products at taxpayer’s responsible storage shall
be implemented as follows:
89.14.1. Listed products are left for responsible storage of the taxpayer or
in the event of his consent at locations, determined by authorized officials
of the tax authority.
89.14.2. Deals made by the taxpayer with violation of these rules shall not
be deemed valid in accordance with procedures, stipulated under
legislation.
89.14.3. In the event of refusal of the taxpayer to accept the products for
responsible storage or in the event of absence of appropriate conditions
for the taxpayer for storage of products, actions performed with
participation of authorized representative (representatives) of the tax
authority, taxpayer (or his representative), two observers and authorized
representative of the facility, shall be made by protocol, goods are
packaged at the same location, locked and withdrawn from the facility for
responsible storage by other taxpayer or authorized offices, designated by
the tax authority.
89.14.4. The protocol on withdraw of goods from the facility shall include
the following:
89.14.4.1. position, first, middle and last named of the person, who
made the protocol;
89.14.4.2. date and place of protocol;
89.14.4.3. information on person from whom products are
withdrawn;

89.14.4.4. information on observers participating during the
development of protocol;
89.14.4.5. information on listing and quality of withdrawn
products.
89.14.5. Protocol on withdrawal of products is signed by tax authority
offic ers, as well as the taxpayer (or his representative), responsible person
of the facility and observers. In the event if the taxpayer or his
representative refuse to sign the protocol, relevant notes shall be made in
this protocol.
89.14.6. Before the revie w of the case on administrative violation
confiscated products are handed for responsible storage by the other
taxpayer or authorized representative designated by the tax authority.
89.14.7. During handover of confiscated products for responsible storage
and by the taxpayer, he shall be warned on liability in accordance with
procedures stipulated under the legislation for allowance of their loss,
use, replacement or hiding.
89.14.8. The made acts and protocols shall be considered in accordance
with this Cod e and Code of the Azerbaijan Republic on Administrative
Violations.
89.15. Inventory of state property, privatization of which is prohibited by the
legislation of the Azerbaijan Republic, as well as the property of the taxpayers,
privatization of which is conducted with resolution of the executive authority, but
the decision on privatization of which is not taken or privatization is not
completed, shall be conducted based on the permit of the relevant executive
authority.
The tax authority, within 15 days f rom the date of issuance of the resolution on
collection by banks and other credit organization to the state budget of debts,
interests an applied financial sanctions on taxes, shall officially apply to the
relevant executive authority with the purpose of notification of consent for
inventory of property specified in this Article. In the event of issuance of permit
for inventory of property within one month, the inventory is performed by the tax
authority in accordance with procedures stipulated under this Code.
89.16. During the listing the taxpayer funds shall be paid to relevant state deposit
account no later than within one business day from the date of listing. Tax authority
submits to taxpayer the copy of the document verifying the payment of funds to deposit. In
listing of jewels, made of gold, silver and pearl, those shall be packaged, sealed and
submitted for responsible storage of the taxpayer (or legal and/or authorized
representative) or other party defined by the tax authority.( 6, 9, 11, 13, 14
, 21)

Article 90. Procedure on tax exemption by taxpayer’s property
90.1. If the taxpayer fails to fulfill his tax obligations within 30 days upon the
seizure of property, the tax authority in order to provide the execution of tax
obligation may appeal to the court for approval on selling the seized property in
necessary quantities on the special auction.
If working life of the seized property expires before the expiration of the period,
specified in the present article, the tax authority will be entitled to a pply to court.
90.2. The court shall review the application of the tax authority, indicated in
article 90.1 of this Code in accordance with procedure of the Civil Code of the
Azerbaijan Republic.
90.3. Calculation of interest on the debt satisfied by a court judgment after the
entering into effect the court judgment on the sale of the registered property of a
taxpayer in a specialized open auction (hereinafter В«the AuctionВ») by a
specialized organization (hereinafter В«the Auction organizerВ») established at
the commodity exchange shall be stopped and executive officer ensures the
payment of tax arrears to the state budget subject to the provisions of Article 90.4
of this Code.
The relevant executive authority provides quarterly data on revenue received
from the sale of distrained taxpayer’s property at the auction to the relevant
body of executive power.
Registered property of a taxpayer with the purpose of selling at an auction shall
be evaluated by an appraiser in accordance with the Law of the Azerbai jan
Republic В«On Valuation activityВ», with the exception of cases when controlled
prices according to the legislation are applied
An appraiser shall be invited by executive officer in an order established by the
legislation within 10 (ten) days from the date of receipt of the writ of execution
issued under the court judgments. Services of the appraiser shall be paid by the
taxpayer pursuant to the decision of court.
Such property shall be sold in the following order:
90.3.1. Property sale at auction — the unconditional sale of the
inventoried property of the taxpayer on the basis of effective court
decision. In this the buyer, proposing the highest price shall receiver the
right of ownership on property.
90.3.2. Specialized entity performs as organizer of auction. Specialized
entity performs the auction on the basis of application of executive officer.

90.3.3. Following documents should be attached to the application of
executive officer:
90.3.3.1. the effective court decision on sale of taxpayer’s
property at auction;
90.3.3.2. execution documents on start of execution, issued in
accordance with court’s decision;
90.3.3.3. information on starting sale price of the property;
90.3.3.4. number of bank account, to which funds from sales of
property shall be transferred;
90.3.3.5. copy of the Act made by the executive officer on arrest of
property;
90.3.3.6. during sells of real estate, documents on this property
required in accordance with legislation;
90.3.3.7. in the event of sells of separate structure — copies of
documents, verifying the right to use the land site or right of
ownership of this land site, at which the structure is located;
90.3.3.8. in the event of sell of long term lease – copy of the
agreement and copy of the document verifying the s tate
registration of this agreement in cases, stipulated under the
legislation;
90.3.3.9. in the event of sell of rights on facility with incomplete
construction — copy of the decision on allotment of additional
land site and construction permit document .
If the expiry period of the inventoried property is less than 60 days upon the
effective date of the court decision or if it is a food product, the executive officer
shall submit the document to the auction organizer within 3 days.
90.3.4. Upon receiving of documents stipulated in Article 90.3.3 of this
Code, the auction organizer no later than within 30 days, and for the fast
expiry date and sell of foodstuff property, as well as food and non- food
products being under risk of spoilage no later than 7 day s before the
auction date shall publish announcement in mass media on auctioned
property.
90.3.5. The announcement shall contain the following information:

90.3.5.1. the list of property being sold by each lot, location;
90.3.5.2. the start sell price of e ach property in accordance with
the list;
90.3.5.3. day, deadline and place of acceptance of applications
and other documents for participation in the auction;
90.3.5.4. information on property owner;
90.3.5.5. amount of down payment, calculated at 5 perce nt of
starting sale price of real estate, at the volume of 10 percent of the
starting sell price of movable property,and bank account to which
the payment shall be made;
90.3.5.6. bank accounts to which payments for property sales shall
be transferred, and amount of funds which will be transferred to
these accounts;
90.3.5.7. date, time and place of auction, contact telephone
number;
90.3.5.8. name of the auction organizer, address, contact telephone
and other requisites.
90.3.6. From the moment of publicat ion of information, persons, who
obtained the right to participate in auction in accordance with legislation,
shall be allowed to check the property taken on auction. Upon the check of
the property, persons allowed to the auction within 5 days before the
auction shall submit to the auction organizer in writing their final decision
on whether to participate in the auction.
90.3.7. In the auction can participate the persons, who applied to
participate, who prepared the documents required within the required
t imeframe indicated in the announcement, as well as persons who
provided the prove of down payment transfer to the bank account shown in
the announcement.
90.3.8. Application for participation in the auction, signed by person or
his authorized representativ e (additionally verified by the seal of legal
entity), in accordance with sample established by the customer shall be
submitted to the auction organizer with following documents attached to
the application:
90.3.8.1. document verifying the transfer of down payment to the
bank account indicated in the announcement;

90.3.8.2. for natural persons — notary approved copy of the
identification document;
90.3.8.3. for legal entities and (or) individual entrepreneurs—
notary approved copy of certificate of taxpayer registration.
90.3.9. Persons are not allowed to the auction if following circumstances
are established by the auction organizer:
90.3.9.1. re -organization, liquidation or bankruptcy of legal
entities;
90.3.9.2. inaccuracy of information submitted by the person;
90.3.9.3. documents are submitted upon the expir y of the
application period;
90.3.9.4. the application is submitted by the person without
relevant authority;
90.3.9.5. not all documents indicated in the list are submitted, or
submitted documents have not been prepared in complying order.
90.3.10. Auction organizer refuses to accept the documents with indication
of causes. Documents of persons, application and documents of which
have not been accepted, with written indication of causes of refusal shall
be returned within the following business day.
90.3.11. Persons submit to the auction organizer the application to
participate in auction and attached documents, as well as 2 copies of the
list of submitted documentation.
Each application and attached documents shall be registered by the auction
organizer in dedicated log maintained in sequential manner with indicated date
and time of application.
Auction organizer returns to the applicant one copy of the list of submitted
documents with indication of the date and time of application submission, as well
as number in registration log.
90.3.12. Auction participants are provided with the ticket indicating their
number in the auction.
90.3.13. The person shall be entitled to re -call its application before the
end of application acceptance period. For this he shall apply to the
auction organizer in writing.

In the application acceptant log relevant notes are made to indicate the re-call of
the application for participation in the auction.
In accordance with provisions of auction, persons, who re -called their
applications at auction, shall be reimbursed for the down payment.
90.3.14. The decision of the auction organizer to allow in auction the
persons, applied to participate in the auction, shall be documented by the
protocol. In this protocol shall be indicated the surnames of persons,
application of which have been accepted or rejected. Motivations of
rejections of applications shall be communicated to persons in writing.
Relevant persons gain the status of auction participant upon the signing of
protocol on acceptance of applications.
90.3.15. Auction organizer shall take all necessary measures for
appropriate filing of all submitted applications and attached documents.
90.3.16. The Customer within 10 days of the date of submission of
executive document for implementation shall form the auction commission
(hereinafter referred to as commission) with 5 members and approves its
work procedures.
90.3.17. The commission membership shall include the auction customer,
auction organizer, one of each representative of relevant executive
authorities. The Chairman of the commission shall be the Customer.
90.3.18. The Commission shall have the quorum if two-thirds of its
membership is present during the meetings. The decisions of the
commission are made on the basis of majority votes. Each member of the
Commission shall have one vote. In equal distribution of votes the vote of
the chairman shall be decisive.
90.3.19. Auction organizer:
90.3.19.1. provide the organization and conduct of auction;
90.3.19.2. verified the fact of implemented or not implemented
sale;
90.3.19.3. Suspends the auction, in the event of arising of disputes
during the auction, until the dispute resolution. If dispute can not
be resolved, declares the auction abortive;
90.3.19.4. make the protocol on results of auction and submits to
the customer for approval;

90.3.20. Auction is held in following order:
90.3.20.1. Starting price is announced for the property being sold.
During the announcement of starting price or sale price increased
upon raise, persons, par ticipating in the auction raise their tickets
expressing the agreement to purchase the property at the
announced price;
90.3.20.2. The auction principal announces every new price three
times. If the number of auction participants, who agree to purchase
the property at announced sale price is two or more, these price is
escalated by customers by raise. If only one customer agrees to
purchase the property at the announced sale prices, such customer
is considered the winner of auction. In this the auction principal
informs on sell of property, its sell prices and winner’s ticket
number.
90.3.20.3. If after 3 time announcement of starting sale price or
reduced price on following auction on property non of the
participants does not raise the ticket, auction is considered
abortive
90.3.20.4. If first auction was abortive or the sale of listed property
was not conducted separately, 10 days before each auction the
announcement shall be made in the mass media, as per article
90.3.5. On second auction the price can be reduced by 10 percent,
with reduction by 20 and 40 percent at third and fourth auction
relatively, below the starting price of the unsold property or unsold
separate part along the list.
90.3.20.5.in this the period between the second and next auction
sh all not exceed 10 days, and in the event of expiry (or expiry
within this period) the timeframe between the auctions shall not
exceed 3 days;
90.3.20.6. it is prohibited to submit to the auction the foodstuffs
with expired period. If such property in accor dance with
legislation is suitable for animal forage, it shall be re -evaluated
within 5 days and sold in accordance with procedures stipulated
under legislation;
90.3.20.7. Upon the end of auction the auction organizer shall
made the protocol on results of auction in two original copies and
in accordance with legislation the sale and purchasing agreement
is signed between the commission chairman, customer and buyer;

90.3.20.8. protocol is signed by the winner or his representative,
chairman and members of the commission in two copies. The
protocol contains brief information on customer and winner, list of
sold property and sale price, bank account to which the sale price
will be paid, receiving of down payment made by the winner of
auction within its obligations under the signed protocol, as well as
other rights and responsibilities of parties. Auction winner and
auction organizer shall sign the protocol at the completion day of
auction. Signed protocol shall be submitted to the seller no later
than within 3 days. The sale and purchasing contract indicated the
name of facility (listing), price of its purchasing, customer and
winner information as well as other data in accordance with
legislation. The Contract shall be signed within 5 days from the
signing date of protocol.
90.3.20.9. if the winner denies to sign the protocol made in
accordance with legislation, the down payment is not reimbursed.
The Customer denying to sign the protocol, shall return to winner
the two times value of down payment, as well as compensate the
losses incurred as a result of participation in auction. The size of
loss is determined by the agreement between the customer and
winner. If parties could not reach the agreement, amount of loss in
determined by the court on the basis of appli cation by one of the
parties;
90.3.20.10. If auction was abortive the down payment is not
returned. The down payment of parties participating in the auction
but not winning it shall be returned within 5 banking days;
90.3.20.11. if auction was abortive the auction organizer shall
develop a protocol.
90.3.21. Information on results of auction within 15 calendar days from
the date of auction shall be published in mass media, where the organizer
has announced the holding of auction.
90.3.22. No later than within five banking days from the moment of
agreement between the winner of auction and customer, funds to be paid
by the auction winner shall be transferred to the bank account indicated
by the seller. The auction organizer shall submit to the customer the
documents that verify costs associated with implementation of auction.
90.3.23. Upon the submission of payment document (documents), verifying
the complete payment of the value of property (or certain lot) the right of
ownership on property (lot) is transfer red to the winner of auction.

90.3.24. Officials of of justice authorities, including executive officers , tax
authorities and auction organizer are not entitled to participate directly or
indirectly in the role of buyers during sales of listed property at open
auction.
90.3- 1. In cases and in order stipulated by the Law of the Azerbaijan Republic В«On
executionВ», distrained property of the taxpayer may be sold in distribution networks,
specified by the execution office.
90.4. Amounts received from selling of seized property shall be directed first to
compensate the costs on application of measures for collection and sell of
property and then for payment of tax, interest and financial sanction amounts. The
remaining part of assets, if not any new taxpayer debts have been formed , shall be
returned to the taxpayer within 3 banking days.
If funds obtained from sale of property are not sufficient for payment of debts to
state budget on taxes, interest and financial sanctions or property was not sold in
auction in accordance with procedures of legislation, the executive officer may
confiscate the other property of the taxpayer at the volume of balance of these
debts in accordance with provisions of the legislation to ensure the payment of
arrears to the state budget.
90.5. Provisions of this article shall be also applied for tax agents.
90.6. The officials and other employees of tax authorities are not allowed to
participate as buyers in auctions neither directly nor through their representatives.
On the basis of enquiry of tax authority the auction facilitator in the form,
determined by the relevant executive authority, shall submit the information to the
tax authority on presentation on auction and sale of the auctioned property of
persons. ( 3, 9, 11, 14 , 16, 24, 26 )
Article 91. Liabilities of the Purchaser of Assets with Respect to Unpaid Taxes
If a taxpayer’s tax liabilities remain unpaid after the seizure of property, a
person that purchased a taxpayer’s assets in the course of an operation which
is not deemed an operation between interrelated persons and was conducted
during a three -year p eriod preceding the date that the arrest was implemented,
shall be jointly responsible for tax payment in the amount that remains after the
deduction of any amounts paid by such person for the purchase of said assets.
Article 92. Responsibility for the wit hholding of tax at the source of payment
Physical and legal persons that pay income without withholding tax on income
(profit) at the source of payment shall bear responsibility, in accordance with the
provisions of this Code, for the taxes not withheld or paid to the budget.

Article 93. Writing off bad tax debts
93.1. Bad tax debts shall be written off by the tax authorities, upon a decision of
relevant financial authorities, when:
93.1.1. the time to demand tax payment or the term for lodging a claim
re garding tax violation has passed;
93.1.2. the tax liability has been annulled pursuant to this Code or other
legislative acts;
93.2. In other cases amounts of debts on taxes, interests and financial sanctions
recognised as bad debts by the court judgement shall be written off in accordance
with existing legislation. (21)
Article 94. Responsibility to prove
94.0. The responsibility to prove the errors in calculation of taxes in cases
stipulated by this Code shall be laid upon:
94.0.1. tax authorities – if er ror is made by the taxpayer,
94.0.2. taxpayer – if error is made by the tax authority.
Special Section
Chapter VIII. Income tax from natural persons
Article 95. Taxpayers
Payers of income tax shall be resident and non- resident natural persons.
Article 96. Taxable Base 96.1. The taxable base with respect to the personal income tax of residents shall
be the taxable income determined as the difference between their gross income for
tax year and expenses (or deductions) stipulated by this Code for this period.
The payment (excluding expenses) for notarial acts carried out by private notary
within one month, as well as for services provided in connection with a notarial
acts is subject to taxation.
If tax is withheld at payment source the taxable base shall be t he taxable income.

96.2. A non-resident taxpayer engaged in activity in the Republic of Azerbaijan
through a permanent establishment should be a payer of income tax with regard to
taxable income connected with the permanent establishment.
Taxable income sh all be a difference between gross income generated in a
specific period from Azerbaijani sources with regard to the permanent
establishment and the amount of expenses with respect to the generation of said
income during that period.
96.3. Non- resident’s gross income not stipulated in Paragraph 96.2 of this
Article, but stipulated in article 125 of this Code, shall be subject to taxation at the
source of payment without consideration of amounts deducted from income.
96.4. A non- resident physical person receiving employment income or income
from the transfer of property shall be a payer of income tax with regard to gross
income for the calendar year from a source in the Republic of Azerbaijan, reduced
by the amount that are attributable to the income for that period, stipulated by this
Code.( 30
)
Article 97. Income
97.1. Income of a resident shall consist of income generated in and outside the
Republi c of Azerbaijan.
97.2. Income of a non- resident shall consist of income generated from the sources
in the Republic of Azerbaijan.
97.3. Income shall cover:
97.3.1. income received as the result of employment;
97.3.2. income from activity which is not (conn ected with) employment;
97.3.3. all other kinds of income except for tax -exempt income.
Article 98. Income received as the result of employment
98.1. Any payments or benefits received by a physical person from employment,
including those received as pensi on, or otherwise, from the former work -place, or
income received by such physical person from future employment shall be
income received in the form of salaries and wages.
98.2. For the purposes of Article 98.1. of this Code, the amount of benefit shall be
equal to the amount indicated below less any expenses of employee incurred with
respect to such benefit:

98.2.1. in the event of loans granted to the natural person at the interest
rate which is lower than the inter-bank credit market interest rate — the
difference between the amount to be paid at the market rate of inter -bank
credit trade for such loans, and amount to be paid in accordance with
lower rates;
98.2.2. in the event of the sale of goods, works, services or gratuitous
transfer thereof by an employer to his employee – the fair market value of
these goods, works, services;
98.2.3. in the event of reimbursement of expenses to an employee – the
amount of reimbursement;
98.2.4. in the event of writing off of the employee’s debt or obligation
to his employer – the amount of such debt or obligation;
98.2.5. 98.2.5. Insurance premiums paid by Employer;
98.2.6. in any other case – unless otherwise stipulated in instructions, the
market v alue of a benefit pursuant to Article 14 of this Code.
98.3. Reimbursement of actual travel allowances, and also daily allowances paid
to the members of deck crew instead of travel allowances at sea transport, fixed
by the respective executive power body o r other expenses, shall not be included in
income.
98.4. The amounts and costs stipulated in Article 98.2 of this Code shall include
excise, value added tax and any other tax which is subject to payment by
employer in relation to the Contract value.
98.5. The income received by employer as the result of costs stipulated in article
109.3 of this Code shall not be a taxable income. ( 3, 9, 14
)
Article 99. Income from activity that is not connected with employment
99.1. Income from activity that is not c onnected with employment shall consist of
incomes from entrepreneurial and non- entrepreneurial activity:
99.2. Income from entrepreneurial activity, including:
99.2.1. income from the realization of assets used for the purposes of
entrepreneurial activity;
99.2.2. income received due to the restriction of entrepreneurial activity or
agreement to its closing;

99.2.3. amounts that are received from the realization of fixed assets and
which are included in income pursuant to Article 114.7. of this Code;
99.2.4. expenses reimbursed, deducted from income according to Article
141 of this Code or from decrease of resources;
99.3. Income from non- entrepreneurial activity, including:
99.3.1. interest income;
99.3.2. dividends;
99.3.3. income from the lease of propert y;
99.3.4. royalty;
99.3.5. amount of taxpayer’s written- off debt, except those included
in article 98.2.4. of this Code;
99.3.6. gains received from the sale of assets not used for entrepreneurial
activity;
99.3.7. amount of presents and heritage received in calendar year, with
exception of those specified in article 98.2.2. of this Code;
99.3.8. any other income that indicates the increase of the net price of
taxpayer’s assets (in the event of submission or calculation of
amortization for the taxation purposes) – other t han salaries and wages;
99.3.9. difference between insurance premiums paid for life insurance and
insurance payments;
99.3.10. payment for notarial acts carried out by private notary, as well as
for services provided in connection with a notarial acts. ( 11, 30
)
Article 100. Adjustment of income
Dividends, interests, leasing fees and royalty for which the withholding tax is applied in
the Azerbaijan Republic in accordance with Articles 122, 123 and 124 of this Code, shall
be deducted from the profits.(21)
Article 101. Income tax rates
101.1. The monthly income shall be taxed at following rates:
Table 1

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.
Income tax of natural persons, subject to withholding tax in accordance with
Articles 150.1.1, 150.1.2, 150.1.3 and 150.1.7of this Code shall be calculated in
accordance with table 1, stipulated under this Article and paid to the state budget.
101.2. The annual income from non- business activity shall be taxed at following
rates:
Table 2
Amount of taxable annual income Tax amount
Up to 24000 manats 14 pe rcent
Over 24000 Manats 3360 Manats + 30% of the amount exceeding
24000 manats
101.3. Taxable income of individuals engaged in business activities without
establishing a legal entity is taxed at a rate of 20 percent.
101.4. From the subject of taxation e stablished in respect of private notaries by
the second paragraph of Article 96.1 of this Code, tax is withheld at a rate of 10
percent. ( 3, 9, 14, 21, 24; 30
)
Article 102. Exemptions and privileges on income tax
102.1. The following income of physical persons shall not be subject to income
tax:
102.1.1. wages obtained abroad by employees of diplomatic services,
assigned to work in foreign states within rotation program, and by officers
of the diplomatic service, engaged in administrative and technical
services, income from official employment, received by employees of
diplomatic and consular services, which are not the citizens of Azerbaijan;
102.1.2. income from the work- place of a person who is not a resident of
the Azerbaijan Republic – if this income is paid by an emplo yer or in the

name of an employer who is not a resident of the Republic of Azerbaijan
and is not paid by a permanent establishment of a non-resident;
102.1.3. income received as gift, moneyed assistance, lump -sum grant and
inheritance in calendar year:
102.1.3.1. Part of the value of gifts, moneyed assistance, lump- sum
grant for the payment of education and medical treatment fees
amounting to up to 1000 manats, part of the value of the moneyed
assistance, lump- sum grant for the payment of medical treatment
abroad amounting up to 2000 manats, part of the value of
succession amounting up to 20000 manats.
Persons, who received payments for education or medical treatment
services, such privilege is provided only in cases, when they submit
relevant documents, ver ifying the payments of these amounts as
appropriate;
102.1.3.2. in the event that a gift or inheritance is received from
family members of the taxpayer – the entire value of such gift;
102.1.4. With the exception of allowances paid in connection with the
te mporary loss of ability to work (earning capacity), government
allowances, irreplaceable government transfers, government pensions,
government living allowances, in case of termination of labor contract due
to reduction of the number of employees and staff , allowances paid to
employees in accordance with Labor Code of the Azerbaijan Republic, as
well as one -time individual payments or moneyed assistances from the
resources of the State Budget based on the Laws of the Azerbaijan
Republic and decisions of the appropriate government authorities.
102.1.5. alimony;
102.1.6. If monthly income, gained in connection with a paid job at the
main workplace (where the labor record is maintained) of a physical
person is up to 200 manats, then the part in the amount of 1 minimum
salary, if annual income is up to 2400 manats, then in the amount of 12
minimum salaries .
102.1.7. income from the realization of movable tangible assets, except for
precious stones and metals, precious stone and metal products, fine art
works, ant ique items as well as property which is used in the
entrepreneurial activity of a taxpayer.
102.1.8. funds paid by money or in kind in the event of insurance case for
compensation of damage to the life of an insured and beneficiary, as well

as damages to his property and property interests, and also all types of
mandatory and voluntary medical insurance premiums paid by employer,
insurance premiums paid by employer to insurers of the Azerbaijan
Republic on accumulative life insurance and pension insurance under
contract concluded for not less than 3 years, any amounts paid to the
insured and beneficiary after 3 years term from the moment of entering the
accumulative life insurance and pension insurance contract into effect.
102.1.9. income from the realization of immovable property which was
the place of residence of a taxpayer for not less than 3 years;
102.1.10. compensation payments related to the compensation of losses
caused;
102.1.11. income received directly from production of agricultural
products;
102.1.12. income of physical persons from craft production of copper, tin
and pottery products, house appliances, gardening instruments, national
music instruments, toys, souvenirs, house appliances made of reeds and
cane, involved in embroidery and product ion of house appliances from
wood;
102.1.13. the amount of wins received from lotteries officially registered
by respective executive power body, as well as obligations of the internal
state winning bonds ;
102.1.14. Compensation payment to natural persons:
102.1.14.1. the amount of additional payments stipulated under the
legislation, as well as daily traveling expense payments to the
crews of marine transport, established by the relevant executive
authority instead of daily traveling expenses to the worker s, which
are always on road during business hours, or their work at field
site and field organizations;
102.1.14.2. amounts of traveling expenses stipulated under
legislation (daily food allowance, utility and transportation costs);
102.1.14.3. lump sump amounts paid during the termination of the
labor contract as a result of downsizing of staff, or death of
employee;
102.1.14.4. amounts of expenditure, paid in accordance with
procedures approved by the legislation at the expense of the

employer for medical examination of employees involved in
difficult, health deteriorating and hazardous areas;
102.1.14.5. the amount of free of charge treatment milk and other
equivalent products provided to employees, engaged in areas with
health deteriorating, heavy work c onditions and underground
work, as well as the value of special cloth, shoes and other
personal protection equipment, issued to the employees within
required time and required assortment;
102.1.14.6. amounts of allowances paid by the enterprises and
organi zation to students, master of sciences, directed to receive the
education out of work;
102.1.14.7. indexation sums of not received or deposited wages;
102.1.14.8. lump sump aid provided on the basis of decisions of
relevant executive authorities, as well as foreign states and other
organizations due to natural disasters and other emergency
circumstances;
102.1.14.9. amounts of compensation paid to donors for the blood;
102.1.14.10. payment for the diving job;
102.1.14.11. allowance for burial;
102.1.14.12. amounts of lump sump financial aid, provided by
relevant executive authorities;
102.1.14.13. financial aid, paid by public entities, charity societies
and funds;
102.1.14.14. doles;
102.1.14.15. All types of payments to military servicemen,
prosecutor office employees, associates of law -enforcement
agencies and special telecommunications services, having special
ranking (with exception of official payments and for military
(special) rankings),as well as all types of wages and other
financial payments to per sons cooperating with investigation
authorities, intelligence and counter -intelligence services;
102.1.14.16. additional amount paid to some category of military
servants for their special service conditions;

102.1.14.16. Amount of allowance paid by the employer in
accordance with legislation of due to call of the employee for
military and alternative service;
102.1.14.18. additional amounts paid to cadets;
102.1.14.19. payment for parachute jump;
102.1.14.20. lump sump payment for continuous long- term service
on navy ships and navy detachment agencies;
102.1.14.21. lump sump payment for continuous service in
airborne troops;
102.1.14.22. lump sump payment to graduates of military facilities;
102.1.14.23. lump sump payment to navy servicemen;
102.1.14.24. payments to persons at military ship;
102.1.14.25. lump sump payment for provision of high military
readiness and excellent discipline of troops;
102.1.14.26. payment allowance to military with service for fixed
period instead of tobacco products;
102.1.14.27. lumps payment to ensigns, warrant officers and
military officers serving above fixed period for establishment of
initial conditions for the families;
102.1.14.28. transportation costs compensated to military for
travels during the services;
102.1.14.29. funds for field (steppe) services;
102.1.14.30. compensation to military for leased accommodation;
102.1.14.31. monetary compensation issued to military instead of
food;
102.1.14.32. monetary compensation issued to military for
tailoring of uniform.
102.1.15. the complete value of prizes received as goods on competitions
and tournaments. The value of monetary prizes received on international

competitions and tournaments – up to 4000 manats, and for those received
in in -country competitions and tournaments – up to 200 manats .
102.1.16. Lump sum, paid as a result of voluntary retirement of the state
employee reaching pensionable age;
102.1.17. Monthly allowance to official salary of the deputies of Milli
Mejlis and judges of the Azerbaijan Republic for compens ation of costs
related with implementation of delegated authorities and monthly
allowance to official salaries of the officials of executive power authorities
of the Azerbaijan Republic, appointed to positions by the decisions of
relevant executive authori ty, as well as other state authorities (agencies)
for compensation of representation costs, related with implementation of
their duties;
102.1.18. Compensation to be paid upon redemption of land for public
use.
102.2. The monthly taxable income from any ty pe of employment shall be
reduced by the amount of 400 manats for following persons:
102.2.1. National Heroes of the Azerbaijan Republic;
102.2.2. Heroes of the Soviet Union and Social Labor;
102.2.3. persons awarded with all three degrees of the Honorary Order;
102.2.4. disabled people of disability groups I and II;
102.2.5. widowed wives (husbands) of war participants who were killed at
war or died later;
102.2.6. income of persons who were awarded orders and medals for
heroic labor in the home front duri ng the years of 1941-1945.
102.2.7. persons who received the status of war veterans in accordance
with legislation;
102.2.8. persons who acquired radiation and radiation sickness or had
these diseases as a result of accidents at Chernobyl AES, radiation
accidents in civil or military atomic facilities, as well as tests, training or
other work related to any kind of nuclear facilities (installations) and
nuclear weapons and space technology;

102.3. The monthly taxable income of disabled people of I and II groups (except
for veterans of war), persons under age of 18 with limited levels of health from
any type employment shall be reduced by the amount of 100 manats .
102.4. The taxable income of the following persons from employment shall be
reduced by the amoun t equal to 55 manats:
102.4.1. parents of war participants who were killed at war or died later,
including parents and wives (husbands) of people in state service who died
during the performance of their duties. Such privilege shall be granted to
the wives (husbands) of these persons, provided that they have not married
again;
102.4.2. parents and wives (husbands), including children living together
with them, of persons who were killed as a result of the intervention of
Soviet troops on January 20, 1990 and during the protection of the
integrity of the territory of the Republic of Azerbaijan. Such privilege
shall be given to the wives (husbands) of these persons, provided that they
have not married again;
102.4.3. military officials involved in the training and test gatherings and
military servicemen who were sent to Afghanistan and other countries
where war operations were conducted;
102.4.4. any of the parents (according to their own decision), wife
(husband), guardian or patron taking care of a child with limited level of
health with whom they live together, who need a permanent care and who
is an invalid from childhood or belongs to the 1st group of disability;
102.4.5. displaced people and persons of similar status. This privilege in
accordance with hous ing legislation or civil legislation deals is not
applicable to persons, residing permanently as a result of obtaining of
personal dwelling space.
102.5. The taxable monthly income of a spouse caring for three persons, to
include pupils and students under the age of 23, shall be reduced by an amount
equivalent to 20 manats of such spouse.
This rule shall be valid for children until the end of the year they reach the age of
18, for students — age of 23, or in the event a of death of children or persons
under patronage.
The taxable income of physical persons shall be reduced beginning from the year
when children are born or when patronage starts.

When the number of persons under patronage lessens (except in the case of death)
during a year the deduction of an amount for the support of persons under
patronage shall be terminated starting from the month following the month in
which the number of such persons lessened.
102.6. The following shall not be persons under patronage:
102.6.1. persons who receive a scholarship, pension, and unemployment
grant (other than children);
102.6.2. persons who are on state maintenance (students of technical
colleges, children maintained in nurseries and kindergartens);
102.6.3. students of special schools and children maintained at boarding
schools for whose maintenance guardians are not charged, as well as
children maintained at boarding schools attached to state maintained
schools.
102.7. If a physical person has several grounds for the right to privilege in
accordance with art icles 102.2, 102.3 and 102.4 of this Code such person shall be
entitled to one of these privileges which is greater in amount.
102.8. During calculation of tax levied from the salary, a physical person’s
right to tax privileges stipulated in this Article shall arise upon the submission of
documents determined by the relevant central executive authorities of the
Republic of Azerbaijan and shall be exercised at the main workplace (where such
physical person’s labor record is maintained). (1, 3, 8, 9, 11, 12, 14, 16 , 17
,
21, 22, 23, 24, 25, 29 )
Chapter IX. Profit tax from legal persons
Article 103. Taxpayers
103.1. Resident and non- resident enterprises in the Azerbaijan Republic shall be
payers of profit tax.
103.2. Any foreign person who is not a physical person shall be treated as an
enterprise for the purposes of this Article, unless it proves that it should be treated
as a joint owne rship pursuant to Article 137 of this Code.
103.3. Provisions of Articles 103.1 and 103.2 of this Code shall not be applied for
the purposes of Article 13.2.39.3. of this Code.
Article 104. Taxable Base

104.1. The profit of a resident-enterprise shall be a taxable base. Profit shall be
defined as difference between all incomes of a taxpayer (except for the income
that is exempt from tax) and expenses (deductions) stipulated in Chapter X of this
Code from the income.
104.2. A non- resident enterprise operati ng in the Republic of Azerbaijan through
its permanent establishment shall pay tax on its profit, i.e. on gross income
generated from Azeri sources in relationship with the permanent establishment
less the amount of expenses incurred with respect to such i ncome as outlined in
this Code.
104.3. The gross income of a non- resident enterprise not connected with the
permanent establishment shall, if so provided in Article 125 of this Code, be taxed
at the source of payment without expenses being deducted.
104.4. A non- resident enterprise generating income through the transfer of
property not connected with the permanent establishment shall pay tax on said
gross income received during a calendar year from an Azerbaijani source. Said
tax shall be paid after the ded ucting the expenses as outlined in this Code and
which relate to such income.( 15
)
Article 105. Tax Rates
105.1. An enterprise’s profit shall be taxed at the rate of 20 percent.
105.2. The gross income (with deduction of VAT and excises) of non- resident,
not connected with the activity of his permanent establishments but received from
Azerbaijani source shal l be taxed at the rates stipulated in Article 125 of this
Code. ( 6, 9, 14, 24
)
Article 106. 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 amount s 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;
106.1.9. value of assets donated free of charge by the decision of a legal
entity from its own balance or one of a resident subsidiaries under its full
ownership to the bal ance of another entity in cases stipulated by the
relevant executive authority;
106.1.10. value of the fixed assets donated free of charge by the decision
of the relevant executive authority from the balance of one legal entity to
the balance of another en tity;
106.1.11. operations on the provision in any form of fixed assets, movable
property and other assets, in accordance with the agreements on
exploration, development and production sharing of oil and gas resources,
export pipelines and other similar agreements to the party representing
the Azerbaijan Republic in the production sharing agreements.
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 in clude disable 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.
106.3. Enterprises on the territory of the Azerbaijan Republic shall pay the profit
tax at the following tax rate stipulated under Article 105.1 of this Code:

106.3.1. In cities Gandja, Sumgayit, Mingechevir and Ali Bayramli
(including districts under the supervision of the above towns) — 80
percent;
106.3.2. In highland regions and Nakhichevan Autonomy Republic —
40 percent;
106.3.3. In other regions (with exception of Baku and Absheron region)
— 60 percent.
106.4. Enterprises engaged in activities indicated in this Article should pay the
profit tax at the following tax rate stipulated under Article 105.1 of this Code:
106.4.1. on tourist activities — 80 percent;
106.4.2. in activities engaging in craft production of copper, tin and
pottery products, house appliances, gardening instruments, national music
instruments, toys, souvenirs, house appliances made of reeds and cane,
involved in embroidery of ceramics, hand carpet production, and
production of house appliances from wood- 40 percent
106.5. Should enterprise be entitled for privileges stipulated under articles
106.2—106.4 of this Code, it shall be provided with one most favorable
privilege.
106.6. Privileges stipulated under Articles 106.3 and 106.4 of this Code shall be
provided to enterprises only when on territories where privileges are provided the
taxpayer implements it s activities with own production facilities, property and
labor. Should enterprise with privileged activity be involved in any other
additional activity it shall control types of activities for which privilege is or is not
applied separately. Otherwise, no privilege is applied.
106.7. For persons registered for tax purposes in cities and districts indicated in
articles 106.3.1, 106.3.2, 106.3.3 of this Code but engaged in activities in the city
of Baku and Apsheron region tax rate shall be applied established for the city of
Baku.
106.8. The list of highland regions is made by the relevant executive authority. ( 3 ,
6, 9, 11, 21, 22, 24 , 27)
Chapter X. Articles concerning income taxes of natural and profit
taxes of legal persons
Article 107. Area of Application
This section shall be applied for the purposes of the income tax and profit tax.

Article 108. Expenses connected with the generation of income
Except f or non-deductible expenses determined under this Article, all expenses as
well as mandatory payments stipulated under the law connected with obtaining
income shall be deducted from such income.
Article 109. Non -Deductible Expenses
109.1. Expenses incurred on the acquisition and installation of fixed assets as well
as other expenses that are characterized as expenses incurred on capital pursuant
to Article 143 of this Code shall not be deducted.
109.2. Expenses that are not connected with economic activity shall not be
deducted.
109.3. Deductions shall not be allowed with respect to representation or
entertainment expenses, as well as expenses connected with food ( with exception
of costs on preventive health food, milk and equivalent products, as well as cos ts
on food for the offshore crews within norms established by the relevant executive
authority) and accommodation.
109.4. If the expenses of a taxpayer whose entrepreneurial activity is of
entertainment nature are incurred within the framework of such acti vity, expenses
incurred on entertainment shall be deducted from the income.
109.5. No deductions shall be allowed with respect to the expenses of a physical
person incurred on personal consumption or receipt of the salary (wages).
109.6. Deductions to rese rve funds shall be made from income only in accordance
with articles 111 and 112 of this Code.
109.7. No deductions shall be allowed with respect to the actual travel costs
exceeding the limit established by relevant authority of the executive power.( 15
)
Article 110. Limitation of Interest Deduction
110. Actual amount of interest on debts obtained from abroad, and also paid to
each other by interconnected persons (when applying payment method- amount of
interest on payment), shall be deducted from the profit within period for which
interests are applied, at the same currency and at the amount not exceeding 125
percent of the average interest on inter -bank trade on credits with similar
periods, or, if no trade was conducted – on inter-bank credits published by the
Central Bank of the Azerbaijan Republic .(6, 24
)
Article 111. Deduction of bad and doubtful debts

111.1. A taxpayer shall be entitled to a deduction for doubtful debts connected
with goods, work and services that have been realized where income from them
was previously included in the gross income received from entrepreneurial
activity.
111.2. Doubtful debt deduction shall be allowed only if the debt is written off as
worthless in taxpayer’s books.
111.3. Banks and credit entities engaged in certain types of banking activities
shall be entitled dependent from classification of assets in order established under
legislation, to deduct from income amounts assigned for establishment of special
reserve funds in accordance with procedures establishe d by the relevant executive
authority.( 6
)
Article 112. Deductions for allocations to reserve insurance funds
A legal entity engaged in insurance activity shall be entit led to deduct allocations
to reserve insurance funds within the norms established by the legislation of the
Republic of Azerbaijan.
Article 113. Deductions for expenditures on research, project -research and
experimental -design work
Expenditures on researc h, project-research and experimental -design work
connected with the receipt of gross income (except for the expenditures on the
acquisition of fixed assets, their installation and other expenses of a capital
nature) shall be deductible.
Article 114. Amorti zation charges and deductions for depreciated assets
114.1. Amortization charges for fixed assets used in entrepreneurial and non-
entrepreneurial economic activity, specified in article 99 of this Code, shall be
deductible in accordance with the conditions of this Article.
114.2. Land, arts, buildings, facilities representing rare historical or architectural
monuments, as well as other wear -proof assets, determined under this Article
shall not be depreciated:
114.2.1. equipment, exhibits, equipment, sample s, operational and non-
operations models, mock -ups and other visual aids used in cabinets and
laboratories of for scientific, educational and practical purposes;
114.2.2. productive livestock (pedigree cows, buffalos, mares, camels,
pigs, deer, sheep, goat s; pedigree bulls, studs, camels and other similar
productive cattle);

114.2.3. exhibits of fauna located in zoos and other similar facilities;
114.2.4. perennial plants;
114.2.5. library funds, film funds (vide, audio, photo), stage requisites,
museum exh ibits;
114.2.6. completely depreciated main assets if suitable for operation;
114.2.7. main assets undergone conservation;
114.2.8. public motor roads;
114.2.9. public park equipment;
114.2.10. main assets at stores, not issued for operations.
114.3. Annual amortization rates as per depreciated assets shall be classified as
follows:
114.3.1. Buildings, facilities and installations, structures – up to 7%;
114.3.2. Machinery, equipment and calculation technology – up to 25%;
114.3.3. Transport means – up to 25%;
114.3.4. Draft animals – up to 20%;
114.3.5. Costs on geological exploration and preparation work for
production of natural resources – up to 25%;
114.3.6. non- tangible assets – for those with undetermined period of use –
up to 10 percent, for those with determined period of use – at years on
amounts pro- rata to period of use;
114.3.7. Other fixed assets – up to 20%;
114.3.8. for production capital investments, as well as property subject to
leasing, actual amount of which is paid in current year (with exce ption of
capital investments of subjects of natural monopolies as well as
enterprising subjects engaged in production of commodities,
implementation of works, provision of services, pricing for which is
regulated by the state), with increase for up to 2 times of annual
amortization levels, stipulated under Articles 114.3.1., 114.3.2., 114.3.3.
and 114.3.7 of this Code.

Capital construction, reconstruction in the form of new construction of premises –
workshops, directly using in the process of production, expansion and technical
renovation of operating plants, and also purchase of units, equipment,
intraproduction transport means and fixed assets, their other facilities (or parts)
are considered as capital investments.
Regulations, specified in the article 114.3.8 of this Code are not applied to:
 В· enterprises and organizations, being forbidden to carry out direct
production activity according to the legislation;
 В· capital investments at the expense of sponsor`s financial assistance and
other gratuitous allowances.
114.4. Amortization charges on each main category is calculated by applying the
amortization levels established for fixed assets, related to each category, indicated
in Article 114.3. of this Code, to the balance value of the category as for the end
of the tax year.
If amortization ch arges applied are lower than those that are established for the
tax year on fixed assets related to any category, the difference created as the result
of this can be added to the amounts of amortization deducted from income in
future tax years.
114.5. Amor tization for buildings and structures (hereinafter – buildings) shall be
charged for each building separately.
114.6. For the purposes of calculation of amortization the residual value on main
assets (main asset) at the end of tax year shall be the amount established in
following order (not less than zero):
 To add value of main assets (main asset) obtained within current year in
accordance with Article 143 of this Code and above limit part of repair
costs for previous year established on the basis of Articl e 115 of this Code
to the residual value of main assets (main asset) at the end of previous
year (value upon the deduction of amortization amount calculated for
subject year), minus residual value of main assets, submitted, liquidated
within the tax year or having residual value of less than 100 manats or 5
percent of initial value.
114.7. If the amount obtained from provision of main assets (main asset) exceeds
the residual value of these main assets (main asset), the difference shall be
included as incom e.
114.8. If the residual value of main asset at the year -end is less than 100 manats
or 5 % of initial value, the amount of residual value shall be deducted from
income.

114.9. If amount obtained from provision of main assets (main asset) is less than
the residual value of these main assets (main asset), the difference shall be
deducted from income. ( 3, 6, 9, 11, 14, 15
)
Article 115. Deductions for repair expenses
115.1. The amount of repair expenses deductible each year shall be limited to t he
balance value as of the previous year-end for each category of fixed assets – 2
percent of remaining value at the end of year of category of main assets, specified
in Article 114.3.1 of this Code, 5 percent of main assets at the end of year of
assets, shown in Articles 114.3.2 and 114.3.3, 3 percent of the remaining value at
the year end of the category of main assets specified in Article 114.3.7, and zero
(0) percent on main assets, to which the depreciation is accounted, in accordance
with value. In event when the actual amount of repair expenses is less than
amount established by this limit than the actual amount of repair expenses shall be
deductible from income.
In such case the maximum value of expenses in following tax years shall be
increased by the difference between the amount of actual repair costs and amount
calculated on established limit.
115.2. Amount, exceeding the limit established under Article 115.1 of this Code
shall be assigned for increase of residual value of main assets (main asset) at the
end of current tax year.
Costs associated with maintenance of main assets, which are not depreciated, for
which the wear (depreciation) is not accounted shall not be deducted from income
and their balance value is increased.
115.3. The procedure on deduction from income of costs for the repair of leased
fixed assets shall be established in accordance with Articles 115.4 – 115.8 of this
Code .
115.4. The amount of costs deducted from incomes for maintenance of leased
main assets shall be limited by interest range stipulated under Article 115.1 of
this Code from the remaining value at the end of previous year for each category
of main assets.
115.5. Terms, provisions of transfer of main assets for leasing, as well as costs for
their maintenance shall be agreed between the Lesser and Lessee in the contract
made, as stipulated under the legislation.
115.6. If repair work is conducted at the expense of Lesser, or Lessee, during the
compensation of leasing payment, provisions of Article 115 of this Code shal l not
be applied to Lesser.

115.7. If the residual value of each category of main assets by the end of previous
year is equal to zero, the actual amount of repair costs shall be assigned to
residual value of relevant category of main assets and depreciation is calculated
in accordance with provisions of this Code.
115.8. Provisions of this Code shall only limit the amount deducted from income
for repair and do not prevent from implementation of repairs at the expense of
other sources of taxpayers. ( 6, 9
)
Article 116. Deduction for insurance payments
116.1 Insurance payments that are pai d by insured parties under insurance
agreem ents shall be deducted, with the exception of insurance payments on
property damage insurance to employees’ favor, as well as life insurance
made by foreign insurance organizations.
116.2. Insurance contributions made on the basis of insurance contracts for
accumulative life insurance and pension insurance, concluded by the physical
entities with the insurers of the Azerbaijan Republic for a period of not less than 3
years and providing the payment of insurance money after a 3- year period from
the date of entry into force of the insurance contract, for tax purposes are
deducted by the employer from income obtained in connection with employment
of this physical entity.
The insurance contributions paid on accumulative life insurance and pension
insurance, to be deducted by the employer from income obtained in connection
with employment of this physical entity, shall be deducted only in case of transfer
to a bank account of the insurer by the bank.
116.3. In the event of early termination of the insurance cont ract under article
116.2 of this Code, paid insurance contributions are taxed at the source of
payment by the insurer. (24
)
Article 117. Expenses on geological surveying and preparatory work for the
production of natural resources
117.1. Expenditures on geological surveying and preparatory work for the
production of natural resources shall be deductible from gross income as
amortization charges at the rates stipulated in Article 114 of this Code.
117.2. This Article shall apply also to expenditures on intangible assets incurred
by the taxpayer in connection with the acquisition of rights to geological
surveying and processing or exploitation of natural resources.
Article 118. Deductions from income of expenses on intangible assets

118.1. Intangible assets shall include expenses of legal and physical persons on
intangible objects used for more than one year in economic activity.
118.2. Expenditures on intangible assets sha ll be deductible from income as
amortization charges at the rate stipulated in Article 114 of this Code.
118.3. When costs on purchasing and production of intangible assets are deducted
from income during calculation of taxpayer’s taxable income, specified costs
shall not be related to the value of intangible assets to be amortized.
Article 119. Limitation of deductions from income
119.0. No deduction shall be allowed with respect to the following taxes,
interests, calculated for delayed payment of taxes, stipulated under this Code and
financial sanctions:
119.0.1. profit tax or any other tax calculated on profit which has been
paid in the territory of the Republic of Azerbaijan or other countries;
119.0.2. financial sanctions, interests, calculated for delayed payment of
taxes, stipulated under this Code, paid.( 11
)
Article 120. Losses upon the realization of prop erty
Losses arising upon the realization by a physical person of property (except for
property used for economic activity or property the income upon the realization of
which is exempt from tax) shall be compensated from the gains received upon the
realiz ation of such property. If the losses cannot be compensated in the year in
which they took place, they shall be carried forward for a period of up to three
years and compensated from the income received from the gains upon the
realization of property.( 14
)
Article 121. Loss Carry -Forward
121.1. Part of expenses exceeding the profit, which is allowed to exclude from the
profits of the enterprise, shall be switched to the next period continuing for up to
five years, and shall be compensated at the expense of the profits of these years
with no limitation on years.
121.2. With respect to physical persons, expenses deductible from gross income
generated from the non -entrepreneurial economic activity, which exceed said
gross income may not be deducted from salaries and wages, but shall be carried
forward for a period of up to three years and shall be covered at the expense of
the gross income generated from entrepreneurial econo mic activity of future
periods. ( 9, 14
, 21)

Article 122. Withholding of tax at the source of payment
122.1. Dividends paid by resident enterprises shall be subject to taxation at the
source of payment at a rate of 10 percent.
122.2. If dividends are taxed pursuant to Article 122.1 of this Code from natural
and legal persons, then the specified income of natural and legal persons shall not
be taxed again.
Such income shall not be liable to taxation when paying it repeatedly as
dividends.
122.3. Distribution of profit under the agreements on exploration, development
and production sharing of oil and gas resources, export pipelines and other
similar agreements, as well as transfers of net profit of subsidiaries wholly owned
by this legal entity and income of this entity, accumulated in the centralized fund
of the legal entity are not taxed. (27)
Article 123. Withholding of tax on interest at the source of payment
123.1. If income received from Azerbaijani source in accordance with Article
13.2.16. of this Code, interests paid by resident or non- resident’s permanent
establishment or on behalf of such establishment with exception of interests paid
on credits (loans ), deposits (accounts) of resident-banks, including, from loan
interests paid on financial leasing operations , to resident persons carrying out
financial leasing or non- resident banks, or permanent establishment of a non-
resident carrying out financial leasing shall be taxed at the source of payment at a
rate of 10%.
123.2. If the actual owner of interest is a natural person, interests from which
taxes are levied, upon their payment to natural person shall not be taxed.
123.3. If the actual owner of interes t is a taxable resident enterprise or the
permanent establishment of non- resident then the specified enterprise or
permanent establishment of non- resident receiving the interest in accordance with
Article 123.1 of this Code, from which taxes are levied sha ll reduce the amount of
tax paid at the source if documents are provided to confirm the payment of tax at
the source of payment.
123.4. Income received as difference between the payments by and to insured
shall be taxed at the rate of 10 percent. ( 6, 14
)
Article 124. Withholding of tax from rent payment and royalty at the source of
payment

124.1. If the income from the rent payment of movable and immovable property,
income from royalty paid by the resident or permanent establishment of non-
resident in the Azerbaijan Republic or paid on his behalf received in accordance
with article 13.2.16. of this Code from Azerbaijani source such income shall be
taxed at the source of payment at the rate of 14 percent.
If leasing payment is paid by natural person, who is not registered as taxpayer,
Lessor in accordance with this Article shall pay the tax at the rate of 14 percent
and upon the registration shall submit the declaration in accordance with Articles
33 and 149 of this Code
124.2 If tax is withheld from natural person receiving the leasing payment or
royalty, or paid in accordance with Artic le 124.1 of this Code, the tax is not
withheld from such incomes
124.3. Amounts paid to resident enterprises in the Azerbaijan Republic and
permanent establishments of non- residents shall not be a taxable base under this
Article.
124.4. Minimum amount of m onthly leasing payment for the purposes of taxation
of immovable property (with exception of resident housing fund) in the Azerbaijan
Republic shall be established by relevant executive authority.( 11, 16, 24
)
Article 125. Withholding of tax on income of non -residents at the source of payment
125.1. Gross income of a non- resident from an Azerbaijani source that is
stipulated in Article 13.2.16. of this Code and that is not attributable to the
permanent establishment of the non- resident located in the territory of the
Republic of Azerbaijan shall be subject to taxation at the source of payment
without deduction of costs at the source of payment at the following rates:
125.1.1. dividends – according to Article 122 of this Code;
125.1.2. interests – according to Article 123 of this Code;
125.1.3. leasing payments, including payments on financial leasing
operations, as well as insurance payments of resident -enterprise or
entrepreneur under risk insurance or reinsurance agreements – 4 percent;
125.1.4. pay ments by a resident enterprise or an individual enterprise for
telecommunication or transport services during international
communications or shipments between the Republic of Azerbaijan or
other states – 6 percent;
125.1.5. the following payments by a res ident enterprise or an individual
enterprise, connected with employment, including the income from

services specified in articles 13.2.16.2, 13.2.16.10 (with exception of
profits obtained as royalty for property, stored or used in the Azerbaijan
Republic), 13.2.16.12 (with exception of profits made as a result of leasing
of immovable property in the Azerbaijan Republic) and 13.2.16.14. of this
Code, as well as income received from the Azeri source – 10 percent;
125.1.6. income in the form of wages paid by a resident enterprise or an
individual enterprise – at the rates specified by Article 101 of this Code;
125.1.7. rent payment and royalty – in accordance with Article 124 of this
Code.
125.2. For the purposes of this Article, payments made by or on behalf of the
permanent establishment of a non- resident in the Republic of Azerbaijan of on his
behalf, shall be considered to be made by a resident enterprise.
125.3.In case if the international treaties on avoidance of double taxation with
participation of the Az erbaijan Republic stipulate the low tax rate or full
exemption from taxes, then tax amount which was overcharged from the source of
payments will be refunded in an order stipulated by the article 87.4 of this Code.
( 3, 14, 15
)
Article 126. Taxation of net profit of non -resident’s permanent establishment at
the source of payment
In addition to profit tax of non- resident’s permanent establishment from any
amount of net income of this permanent establishment at the source of payment,
transferred (i ssued) to the favor of such non- resident tax shall be withheld at the
rate of 10 percent.( 9
)
Article 127. Foreign Tax Credit
127.1. Amounts of income tax or profit tax of resident enterprise paid outside the
Republic of Azerbaijan from the incomes of not Azerbaijani source shall be
credited upon the payment of tax in the Republic of Azerbaijan.
127.2. The amounts of the credit stipulated in Article 127.1 of this Code sha ll not
exceed the amount of tax charged on that income or profit in the Republic of
Azerbaijan at the rates in effect in the Republic of Azerbaijan.
Article 128. Income received in countries with concessive taxation
128.1. If a resident directly or indire ctly holds more than 20 percent of the basic
charter capital or possesses more than 20 percent of the voting shares of a foreign
legal entity that, in turn, received income from a state with concessive taxation,
said income of the resident shall be include d in its taxable income.

128.2. A foreign state shall be considered a state with concessive taxation, if in
that country the tax rate is 2 or more times lower than that determined under this
Code, or if there exist laws on confidentiality of information about companies,
which allow secrecy to be maintained concerning financial information, as well as
the actual owner of property or income (property) receiver.
Article 129. Tax year
A tax year shall be a calendar year.
Article 130. Procedure for recording in come and expenditures
130.1. With a view to reflecting clearly taxable income (or profit), the taxpayer
shall be obliged to maintain accurate and timely records of income and
expenditures on the basis of documented data and shall assign, using methods
provided for in this Chapter, said income and expenditures to relevant reporting
periods during which they were received or incurred. The method used by
taxpayer shall take account of all requirements concerning the moment of
expenditures and receipts and proc edure for their accounting. Taxpayer can use
cash basis or accrual basis method as an accounting method.
Legal and physical entities shall keep the records of profit and losses according
to the current legislation of the Azerbaijan Republic. With taxation purposes the
profit and losses are established on the basis of this Code. (3)

130.2. Taxpayer shall be obliged to ensure that all operations connected with its
activity are recorded in such a manner that their beginning, course and end can be
discerned.
130.3. Subject to the provisions of this Article, taxable income shall be calculated
by the method used by the taxpayer for his own book- keeping, provided that
adjustments necessary for meeting the requirements of this Code are incorporated.
130.4. Taxpayer may use cash method or accrual method of tax accounting,
provided that the same method is applied by taxpayer during a year.
130.5. If the accounting method of taxpayer is changed, adjustments to accounting
operations affecting the tax amount shall be effected in the year that the
accounting method changed, so that none of the operations is left out or included
twice.
Article 131. Procedure for recording income and expend itures using the cash basis
method

Taxpayer using cash method shall account for income at the moment that it
actually receives such income or such income is transferred to its disposal and for
expenses – at the moment that these expenses are actually incu rred.
Article 132. Moment of receipt of income when using the cash basis method
132.1. The moment of receipt of income shall be considered the moment that cash
monies are received. Should non- cash payment be made, the moment of the
receipt of income shall be the moment said monies are transferred to
taxpayer’s bank account or to another account at his disposal or from which
he is entitled to receive said resources.
132.2. In the case of annulment or discharge of taxpayer’s obligation, i.e. in
the event of mutual offsetting, the moment of the receipt of income shall be
considered the moment that the obligation is annulled or discharged.
Article 133. Moment of carrying out expenses when using the cash basis method 133.1. When taxpayer uses the cash method for tax accounting purposes, the
moment of carrying out expenses shall be the moment that these expenses are
actually incurred unless otherwise provided for in this Article.
133.2. If taxpayer pays out cash monies, the moment of incurring expenses shall
be the moment the monies are paid. Should non- cash payment be made, the
moment of incurring expenses shall be the moment that the bank receives the
order of the taxpayer to transfer said funds.
133.3. In the case of the annulment or discharge of taxpayer’s financial
obligation, i.e. in the event of mutual offsetting, the moment of carrying out
expenses shall be the moment that the financial obligation is annulled or
discharged.
133.4. When payi ng interest on a debt obligation or making payments for rental
property (if the term of the debt obligation or rental agreement extends over
several reporting periods) the amount of interest (or rent) actually paid, which is
deductible for the tax year sha ll be deemed as the amount of interest (or rent)
calculated for that year.
Article 134. Recording income and expenditures using the accrual basis method Taxpayer maintaining records using the accrual basis method shall record income
and expenditures based on the moment of the acquisition by taxpayer of the right
to that income or of the acknowledgment of the expenditures, respectively,
regardless of the moment that the income is received or the expenditures are
incurred.

Article 135. Moment of the receipt of income when using the accrual basis method 135.1. The right to receive income shall be considered to have been acquired if
the relevant amount is subject to unconditional payment to taxpayer or taxpayer
has fulfilled all its obligations under the trans action.
135.3. If taxpayer fulfills work or provides services, the right to receive income
shall be considered to have been acquired at the time when the fulfillment of such
work under the agreement has been fully completed.
135.3. If taxpayer receives inc ome, or has the right to receive interest income or
income from the lease of property, the right to receive income shall be considered
to be acquired at the moment of expiration of the term of the debt obligation or
lease agreement. If the term of the debt obligation or lease agreement extends
over several reporting periods, the income shall be distributed among these
reporting periods according to the procedure for the calculation of this income.
Article 136. Moment of carrying expenditures when using the accrual basis method 136.1. When taxpayer uses the accrual basis method in tax accounting, the
moment of carrying expenditures in respect of a transaction (agreement) shall,
unless otherwise provided by this Article, be considered when all the following
condition are fulfilled:
136.1.1. taxpayer’s acceptance of a financial obligation can be
acknowledged indisputably;
136.1.2. the amount of the financial obligations can be valued with
sufficient accuracy; and
136.1.3. all of the parties to the transaction (agreement) have actually
fulfilled all their obligations under the transaction (agreement) or the
relevant amounts are subject to unconditional payment.
136.2. In relation to the above mentioned, financial obligations shall be such
obligations assumed ac cording to a transaction (agreement), for the fulfillment of
which the other party to the transaction (agreement) will be required to pay
relevant income in monetary or other form.
136.3. When paying interest or rental on a leased property the debt obligat ion
term or lease agreement term shall cover few reporting periods, the income shall
be distributed among these reporting periods in accordance with the procedure for
their calculation.
Article 137. Distribution of income from joint ownership

In the case of joint ownership agreements or agreements that involve ownership
by more than one person without establishing a legal person, income and
expenditures resulting from said agreements shall be attributed to owners
according to the agreement and tax shall be imposed according to the participating
interest of such owners.
Article 138. Income and deductions under long -term contracts
138.1. В«Long -term contractВ» – shall mean a contract on production
(manufacture), installation or construction, or the performan ce of related service,
which is not completed within a tax year. Contracts to be completed within 6
months of the date on which work under such contracts commenced shall be an
exception.
138.2. If taxpayer uses the accrual method of accounting, income and deductions
with respect to long -term contracts shall be accounted for during the tax year in
accordance with the actual percentage of completion of such contracts.
138.3. Percentage of a completion of a contract shall be determined by comparing
the expendi tures borne by the end of the tax year against the total expenditures
under the contract.
138.4. Provisions of Article 138 of this Code shall not be applied to simplified tax
payers for operations in residential housing constructions. ( 15
)
Article 139. Procedure for Recording Stocks of Commodities and Materials
139.1. Taxpayer shall be obliged to include in stocks of commodities and
materials any goods in its possession and to be used for subsequent sale or for
production of goods, doing work or providing services.
139.2. When accounting for commodity and material stocks, taxpayer shall be
obliged to reflect in tax accounting the value of goods produced or acquired by it ,
such value being determined on the basis of the production cost or purchase price
of these goods, respectively. Taxpayer shall also be obliged to include storage or
transportation costs on these goods in their value.
139.3. When recording commodity and m aterial stocks, the taxpayer may assess
the value of obsolete, defective or out -of date goods (or products), that cannot be
transferred at a price higher than their production cost or purchase price for the
same reasons, on the basis of the price at which said goods (or products) can be
transferred.
139.4. The taxpayer holds the right to keep the accounting of commodity and
material stocks using the method of valuation at average cost if he is not keeping
the individual record of goods on which he has the a uthority.

Article 140. Financial lease 140.1. If a lessor lets tangible assets to lease under a financial lease agreement,
the lessee shall, for taxation purposes, be considered owner of the assets and lease
payments – payments on the loan granted to the lessee.
140.2. Lease of assets shall be considered a financial lease in the following cases:
140.2.1. the assets are to be transferred to ownership upon the termination
of the lease period or the lessee is entitled to purchase the assets at a
determined or presumed price upon the termination of the lease period; or
140.2.2. the lease term exceeds 75% of the service period of the leased
assets; or
140.2.3. the residual value of the leased assets upon the termination of the
lease is less than 20 percent of th eir value at the beginning of the lease;
140.2.4. the current discounted value of payments over the entire lease
term is greater than or equal to 90% of the fair market value of the assets
as of the beginning of the lease.
140.2.5. the leased property has been prepared for the lessee by the order
of the lessee and may not be used, upon the termination of the lease term,
by any person other than the lessee.
140.3. The Article 140.2.4. of this Code shall not apply to a lease that started
during the final quar ter of the term of utilization of assets.
140.4. In case when no interest rate is mentioned on loan payments in a financial
leasing contract or to non- residents carrying out financial leasing, as well as to
interdependent persons the interest rate used for establishment of current value of
financial leasing payments shall be taken for the period to which payments are
applied in the same currency at volume of 125 percent of the average interest on
inter -bank trade on credits with similar periods, or, if no t rade was conducted
— on inter -bank credits.
140.5. For the purposes of this Article, the lease term shall include any period for
which the lessee is entitled to extend the lease.
140.6. In the cases where the lessee is the owner of the assets before the start of
the financial lease, the transaction property shall, in addition to the regime of
granting loan stipulated in Article 140.1. of this Article, be regarded as a sale by
the lessor and purchase by the lessee. ( 6, 14
)
Article 141. Compensated deductions and reduction of reserves

141.1. If previously deducted expenses, losses, or doubtful loans are reimbursed,
then the amounts received shall be deemed income for the moment in which they
were reimbursed.
141.2. If previously deducted reserves are reduced, then the amount reduced shall
be included in income.
Article 142. Income and l osses upon the realization of assets
142.1. Income from the realization of assets shall consist of the positive difference
between the proceeds from the realization of such assets and the cost of the assets
as determined in accordance with Article 143 of this Code. Upon the transfer of
assets on a gratuitous basis or at a reduced price, the income of the person
transferring the assets shall be determined as the positive difference between the
market value of the property so transferred and its cost as determined in
accordance with Article 143 of this Code.
142.2. Losses from the realization of assets shall consist of the negative difference
between the proceeds from the realization of such assets and their cost as
determined in accordance with Article 143 of this Code.
142.3. This Article shall not apply to the assets subject to amortization under the
method of classification into categories stipulated by Article 114 of this Code. ( 6)
Article 143. Cost of assets
The cost of assets shall include outlays for their acquisition, production,
construction, assembly and installation as well as other outlays that increase their
value with the exception of outlays for which the tax payer is entitled to a
deduction.
In the event of obtained assets to cover credits, the interest on credits do not
increase the value of assets and shall be deducted from profits as per Article 108
of this Code. ( 15
)
Article 144. Non -recognition of profit or losses
144.1. No profit or loss shall be taken into account in the following cases when
determining taxable income:
144.1.1. assets are transferred between spouses;
144.1.2. assets are transferred between former souses as part of a divorce
settlement;

144.1.3. assets are impartially liquidated or alienated where the proceeds
are reinvested in an asset of the same or similar nature before the end of
the second year following the year in which the liquidation or alienation
took place.
144.2. The cost of the replacing asset described in Article 144.1.3. of this Code
shall be determined with reference to the cost of the replaced asset at the time of
the liquidation or ali enation.
144.3. The cost of an asset acquired in a transaction in which profit is not taken
into consideration for tax purposes under Articles 144.1.1. or 144.1.2. shall be the
cost of the transfer or on the date of transaction.
144.4. This Article shall not apply to assets depreciated by the method of
classifying into categories under Article 114 of this Code, except for the cases
where all assets in a category are transferred at the same time.( 6)
Article 145. Liquidation of legal person
144.1. The liquidation of a legal entity shall be treated as a nullification of all
participating interests of the participants therein, unless otherwise stipulated in
this article.
144.2. If a legal person is liquidated and its asset is transferred to a participant that
is a legal person or before the liquidation the participant held 100% of the
participating interests in this legal person: 144.2.1. the transfer shall not be treated as t he taxable transfer by the
liquidated legal entity;
144.2.2. the cost of the assets transferred to the participant shall be equal
to the cost of such assets to the liquidated legal person prior to the transfer;
144.2.3. the distribution of the assets shall not be a dividend;
144.2.4. no profit or loss shall be taken into consideration upon the
cancellation of the participant’s interest in the liquidated asset;
144.2.5. the balance value of fixed assets of any category shall be
transferred to the person gaining such fixed assets.
145.3. This Article shall not apply to the assets depreciated by the method of
classifying into categories under Article 114 of this of this Code, unless all assets
in the category are transferred at the same time.

145.3. Article 145.2 of this Code shall apply only if the tax agency proves that the
main objective of a complete liquidation was not tax evasion. (6
)
Article 146. Establishment of a legal person
146.1. The transfer of assets shall not be deemed their alienation in the following
cases:
146.1.1. a physical person, or a group of physical persons, transfers one or
more assets (with or without any liability) to a legal person in exchange
for a participating interest in that legal person;
146.1.2. a physical person, or a group of physical per sons, owns 100% or
more of the participating interests immediately after the exchange.
146.2. The cost, to the transferee, of the assets to which Article 146.1. of this
Code applies shall be equal to the cost, to the transferor, of those assets at the time
of the transfer.
146.3. The cost of a participating interest received by exchange stipulated in
Article 146.1 of this Code shall be equal to the cost of the assets transferred less
any liability transferred.
146.4. This Article shall not apply to the asse ts depreciated by the method of
classifying into categories under Article 114 of this Code, unless all assets in the
category are transferred at the same time.
146.4. If the liabilities transferred exceed the cost of the assets transferred, this
Article sh all not apply to the difference between these amounts. ( 6
)
Article 147. Reorganization of a legal person
147.1. The cost of the property and participating interests hel d by a legal entity or
entities that are parties to the reorganization shall be equal to the cost of said
property and interests immediately before the reorganization. The balance value
of fixed assets connected to any depreciation category shall be transf erred to
person who purchased these fixed assets.
147.2. The transfer of property or participating interests between the legal persons
that are the parties to reorganization shall not be treated as a surrender of
property.
147.3. Any exchange of participat ing interests in a resident legal person which is
a party to a reorganization for participating interests in another resident legal
person which is also a party to that reorganization shall not be deemed taxable
alienation of a participating interest.

147.4. The cost of the participating interests exchanged under Article 147.3. of
this Code shall be equal to the cost of the original participating interests.
147.5. The distribution of participating interests connected to the exchange of
participating share o f resident legal person who is the party of reorganization to
the participating interests in other legal person – party of reorganization shall not
be considered as dividends for the parties of reorganization.
147.6. The value of original participating inte rests, under article 147.5. of this
Code shall be divided immediately after distribution of original and distributed
participating shares proportional to their market value.
147.7. Reorganization of legal person shall be:
147.7.1. merger of two or more res ident legal persons;
147.7.2. acquisition or take -over of 50% or more of the voting
participating interests and 50% or more of the value of all the participating
interests of a resident legal person solely in exchange for the participating
interests of the party of reorganization;
147.7.3. acquisition of 50% or more of the assets of a resident legal person
by another resident legal person solely in exchange for voting participating
interests with no preferential rights as to dividends of the party of
reorga nization;
147.7.4. a split -up (division) of a resident legal person into two or more
resident legal persons;
147.7.5. a split -off (establishment of a new legal person by separation)
provided that the tax agency proves that the main objective of such
merger , acquisition, takeover, split -up and split -off was not tax evasion.
147.8. Any legal person party to reorganization, or any legal person who owns the
resident legal person- party to the reorganization, or any legal person belonging to
such person shall be deemed as party to reorganization.
147.9. For the purposes of Article 147.8 of this Code, the owner of a legal person
shall mean an owner of 50% or more of the voting participating interests and 50%
or more of the value of all the remaining participating interests in the legal person.
147.10. This Article shall not apply to the fixed assets depreciated by the method
of classifying into categories under Article 114 of this Code, unless all assets in
the category are transferred at the same time.( 6)
Article 148. Change of control over a legal person

148.0. Where there has been a change in the principal ownership of a legal person
for 50 or more percent as compared with the ownership one year earlier, the
carry -forward of a loss, deduction or credit from a previous taxable year shall not
allowed in the following cases:
148.0.1. the legal person carries out the same ownership activity during
three years after the change occur red;
148.0.2. the legal person does not start a new ownership activity during
one year after the change occurred.
Article 149. Filing of Tax Returns 149.1. The following taxpayers shall submit tax returns to tax authorities within
the terms stipulated in Article 149 of this Code:
149.1.1. resident enterprises;
149.1.2. non- residents who have permanent establishments in the
Azerbaijan Republic;
149.1.3. non- residents, taxable income of which is generated from the
Azerbaijani source and specified income of w hich is not taxed at the
source of payment;
149.1.4. private notaries, natural persons with incomes, for which the
withholding tax is not stipulated (not possible), or natural persons –
residents, obtaining profits from the outside of the Azerbaijan Republic ,
including those obtaining profits from royalty.
149.2. Persons mentioned in Article 149.1 hereof (except for private notaries)
shall submit their tax return no later than March 31 of the year following the
accounting year. Private notaries must submit a tax return to the tax authority no
later than the 20
th of next month at the end of each quarter.
149.3. In the event that taxpayer ceases his/its ownership activity in the Republic
of Azerbaijan, he/it shall submit the return to tax authorities within 30 d ays. For
the purposes of this Article the accounting period shall cover the timeframe from
the beginning of tax year until the day of entrepreneurial activity cessation by the
taxpayer.
149.4. Upon the liquidation of a legal person the liquidation commissi on or
taxpayer shall immediately notify the State tax authorities of such liquidation in
the manner established by legislation. Termination commission shall give to the
tax authority the declaration from the date of liquidation, shown in the decision
on li quidation of legal entity, and if this date is not shown for the permanent

representation of non-resident, within 30 days upon the date of legalization of the
decision by representation of the Azerbaijan Republic in foreign states
(consulates of other stat e representing the interests of the Azerbaijan Republic) .
149.5. A physical person who is not required to file a declaration may file a
declaration claiming recalculation of tax and refund of resources.
149.6. A non- resident taxpayer which has no permanent establishment in the
Republic of Azerbaijan and receives income taxed at the source of payment in
accordance with articles 125.1.3., 125.1.4., 125.1.5. and 125.1.7. of this Code
shall be entitled to the tax refund by filing a declaration about such income . Such
declaration shall be filed within the term stipulated by the first sentence of article
149.2 of this Code. Such taxpayer shall be taxed at the rates as determined for the
income of the permanent establishment of a taxpayer in the Republic of
Azerbai jan in accordance with Article 105.1 of this Code. The expenses of
taxpayer incurred in connection with the permanent establishment shall be
deductible under the same procedure established for permanent establishments,
provided that the tax does not exceed the amount of tax withheld at the source of
payment in accordance with Article 125 of this Code. ( 6, 9, 11, 14, 30
)
Article 150. Procedure for withholding tax at the source of payment
150.1. The following persons (tax agents) shall be obliged to withhold tax at the
source of payment:
150.1.1. legal persons which make payments to physical persons working
as employees;
150.1.2. entrepreneurs who make payments to physical persons working as
employees, and private notaries ;
150.1.3. legal or natural persons paying out pensions to persons, with the
exception of paid under the State social security system;
150.1.4. resident legal persons paying dividends to legal and natural
persons;
150.1.5. legal or natural persons paying interests to legal or physical
persons;
150.1.6. legal or natural persons making payments stipulated in Articles
124, 125 or 126 of this Code;
150.1.7. legal persons or individual entrepreneurs making payments to
natural persons for services (works) provided, not registered by tax
authorities as a taxpayers, without provision of TIN;

150.1.8. insurers paying premiums, in case of early termination of the
insurance contract under article 116.2 of this Code.
150.2. Persons indicated in article 150.1 of this Code shall be responsible for
withholding and transferring taxes to the budget. If tax amounts are not withheld
or not transferred to the budget , legal or natural persons paying income shall be
obliged to pay to the budget the taxes not withheld and associated sanctions and
interests.
150.3. Legal persons, private entrepreneurs and private notaries, withholding tax
at the source of payment in acco rdance with Article 150.1 of this Code shall be
obliged to:
150.3.1. to the calculation of income tax on the calculated monthly income
of physical persons in accordance with Articles 150.1.1, 150.1.2 and
150.1.8 hereof, and payment of the calculated tax to the Budget not later
than the 20
th day of the next month;
150.3.2. to the payment of taxes to the Budget not later than the 20
th day of
a month after the quarter when the income was paid, in accordance with
Articles 150.1.3 to 150.1.7 hereof.
150.3.3. dec laration of taxes withheld at the source of payment in the form
prescribed by the relevant executive authority shall be submitted to the tax
authority by:
150.3.3.1. persons withholding the tax at the source of payment in
accordance with Articles 150.1.3.- 150.1.8 of this Code – not later than on
20th of next month;
150.3.3.2. VAT payers and the payers of the simplified tax, withholding the
tax at source of payment in accordance with Articles 150.1.2 and 1501.1
of this Code – not later than on 31st January of the year following the
reporting year;
150.3.3.3. excluding VAT payers and payers of the simplified tax, other
taxpayers withholding the tax at source of payment in accordance with
Articles 150.1.1 and 150.1.2 of this Code – not later than on 20th of next
month after the end of the quarter.
150.4. The tax agent shall withhold the tax from the taxpayer at his place of
employment. If the taxpayer is not obliged to submit the return, then it shall be
considered as the entire amount of income tax. Should taxpayer not to use rights
granted by Article 149.5 of this Code, the withheld tax shall be considered the
complete amount of income tax. ( 3, 9, 11, 14, 16, 24, 30
)

Article 151. Current tax payments
151.1. Legal and natural persons shall be obliged to make current payments to the
budget no later than the fifteenth day of the month following each quarter.
Enterprises and organizations, which are owned by municipalities, shall pay taxes
to loca l (municipal) budget. The amount of each payment shall be 1/4 of the tax
amount calculated in tax year. Private notaries must pay the tax, calculated
according to the rate established in Article 101.4 of this Code, to the state budget
not later than the 20
th of next month.
151.2. The taxpayer may determine the amounts of current tax payments by
multiplying the volume of his income in relevant quarter to coefficient of tax
weight in the gross income for previous year (with no consideration of amounts to
be d educted from income).
151.3. In this, the taxpayer selects annually until April 15 one of the two modes
for calculation of the amount of payable taxes within the year and informs the tax
authority. In the event that a taxpayer has chosen the method provide d by Article
151.2 hereof for the determination of the amount of current tax payments, within
15 days after the end of each quarter, he shall submit a certificate to tax
authorities about current tax amount calculated on the profit or income,
otherwise the tax authority shall apply the method provided by Article 151.1
hereof. In case, when the taxpayer will not inform about mode applied for
calculation of the amount of current tax payments, the tax authority will apply the
first method and such method shall not be changed until the end of tax year.
151.4. Current tax payments shall be the amounts of tax withheld from the
taxpayer within tax year.
151.5.Current tax payments not applying in previous tax year, but acting in the
next tax year of the legal and physical entities (further – taxpayers previously not
active), carrying out business activity without establishment of the legal entity,
and also new established and acting taxpayers are to be determined shall be
implemented as follows:
151.5.1. Current tax payments on income tax or profit tax of taxpayers,
previously not active shall be calculated on quarterly basis, within the
calendar year on the basis of tax rates stipulated under this Code.
151.5.2. The amount of current tax payments can not be less than 75
percent of the amount of the amount of profit or income tax.
151.5.3. Taxpayers not involved previously activities, within 15 days upon
the end of quarter shall perform current tax payment and provide to the
tax authority the note on current tax amount , calculated within the quarter
from the income or profit.

151.5.4. If current tax payments are not paid by the taxpayer, previously
not active, within timeframe defined under Article 151.5.3 of this Code, for
unpaid current tax payments the interest shall be paid for each extended
day of payment in accordance with procedures stipulated under Article 59
of this Code.
151.5.5. The interests established under Article 151.5.4 of this Code shall
be applied towards current tax payment for delayed taxes, revealed as a
result of tax inspection, conducted for entire period of payment but less
than for a year.
151.5.6. Current tax payments are assigned to the amount of tax withheld
from the taxpayer, not previously involved in activities, over tax year.
151.5.7. Upon registration of payers of simplified tax for the purposes of
value added tax, the amount of current tax payment is defined in
accordance with this Code.
151.5.8. In the event is taxpayers, not previously involved in activities did
not submit the relevant note, stipulated under Articles 16.2 and 151.5.3 of
this Code, the tax authority shall calculate the amount of current tax
payments on the basis of similar information on taxes in accordance with
Article 67 of this Code and shall submit the relevant notifi cation to the
taxpayer.
151.6. Upon the ending of reporting period, current tax payments shall be re –
calculated and if in this the calculated amount of current tax exceeds the tax
amount indicated in the report, the exceeding amount of current tax as well as
interests accrued shall be decreased.( 3, 6, 9, 14, 15
)
Article 152. Tax Payment for Year End
152.1. Taxpayers shall carry out final calculations and pay taxes before the date
established for the submission of tax returns.
152.2. Enterprises owned by municipalities shall transfer the profit tax to local
budget and other enterprises to the state budget. Natural persons shall pay the
profit tax to the state budget.
Chapter XI. Value Added Tax
Article 153. Concept of value added tax
The Value Added Tax (hereafter referred to as the VAT) is the difference between
the amount of tax calculated from taxable turnover and the tax amount which is
creditable according to electronic tax invoices submitted in accordance with

provisions of this Code or documents reflecting the payment of VAT in import. (3 ,
24 )
Article 154. Taxpayers
154.1. Any person who/which is registered or to be registered as VAT payer shall
be VAT payer.
154.2. A person registered as VAT payer shall be considered a taxpayer from the
date that the registration takes effect. A person who must file for registration, but
has not been registered, shall be considered taxpayer from the beginning of the
accounting period following the period in which the obligation to apply for
registration arose.
154.3. All persons importing taxable goods into the Republic of Azerbaijan shall
be considered payers of VAT on goods so imported.
154.4. A non- resident person who performs work, or provides a service, without
being registered for VAT purposes and who is subject to tax in accordance with
Article 169 of this Code shall be considered taxpayer on such work or service.
154.5. The joint entrepreneurial activity implement ed without establishment of
legal person, stipulated by article 137 of this Code, for the purposes of VAT shall
be considered as activity implemented by separate person.
154.6. Producers of the goods subject to excise application and persons engaged
in hom e construction activity are considered as VAT payers. ( 3, 24
)
Article 155. Requirement for submission of application on registration
155.1. Legal entities engaged in business activity, whose volume of taxable
transactions during consecutive 12- month period exceeds 150000 manats and
physical entities whose volume exceeds 90000 manats ( except those specified in
Article 218.1.1.1 of this Code), within 10 days after the end of this period must
submit an application for registration for VAT purposes to the tax authority.
155.2. A non- resident’s providing goods, performing work and rendering services
shall, when determining the total volume of taxable transactions for the purposes
of Article 155.1. of this Article, shall be taken into account through permanent
establishments in the Republic of Azerbaijan.
155.3. In the event stipulated by Art icle 155.1. of this Code as well as in the case
when participant is the VAT payer, the person indicated in Article 154.2. of this
Code shall submit the application on registration.( 3, 6, 9, 16, 24
)
Article 156. Voluntary registration

A person engaged in business undertakings who does not need to be registered
may voluntarily hand in a tax authority an application about registration with the
purposes of VAT.
156.2. The application, the form of which shall be determined by the appropriate
executive authority, may contain the following information, along with other
information:
156.2.1. type of the business undertakings intended;
156.2.2. expected quarterly turnover;
156.2.3. types of goods provided, works executed and services rendered;
156.2.4. amount of financial resources to carry out the activity;
156.2.5. sources of goods, works and services;
156.2.6. number of employees to be used during the activity;
156.2.7. value of production equipment and other assets to be used during
the activity.( 14 , 21)
Article 157. Registration
157.1. An application for compulsory or voluntary registration for VAT purposes
shall be submitted in the pro- forma determined by the relevant executive
authorities.
157.2. When persons is undergoing the VAT registration t he tax authority shall register
such person in the state register of VAT payers and no later than within 5 business days
from the date of submitted application issue the registration notification in the form set
by the relevant executive authority, indicat ing in this notification the name of the
taxpayer and other relevant data, date of entering of validity into force and his TIN.
In the event that the information provided by a person in the application was
found to be wrong, the tax authority shall make up a substantiated report in the
form as provided by the forth paragraph of Article 157.2 hereof on the results of
the investigation. The statement shall be drawn up in two copies and one copy
given to the person. The person shall, within 5 days after receiving the statement,
remove the inaccuracies and submit the application to the tax authority, if there
are no inaccuracies in the application submitted, the person shall be registered
and a notification of his registration sent to the person.

If the person did not remove inaccuracies as provided in the second paragraph of
this article and was not registered, by tax authority shall be submitted the
notification on rejection without registration.
Form of the statement drawn up on the results of the investigati on shall be
established by the appropriate executive authority
Notification on registration of VAT payer shall be issued to the VAT payer just
once and kept by him. If the notification on registration of VAT payer is lost or
became unusable the copy of notification shall be issued on the basis of the copy
of notification.
157.3. The registration shall take effect as of the following dates, whichever is
earlier:
157.3.1. for mandatory registration — on the first day of the accounting
period following the month in which the application for registration was
submitted;
157.3.2. for voluntary registration — on the first day of the accounting
period following the m onth in which the application for registration was
submitted;
157.3.3. on the date indicated in taxpayer’s application for
registration.
157.4. Tax agency shall be obliged to start and maintain a list of registered VAT
payers. In the event of adding of t axpayers into the VAT registry, information is
used which is contained in the application for registration, submitted to the tax
authorities.
157.5. The tax agency shall, on its own initiative, register and send a registration
notification to any taxpayer who/which is subject to registration for VAT
purposes, but has not applied for such registration (with exception of taxpayers
specified in paragraph two of Article 158.2 of this Code).
157.6. Should any change occur to the information of VAT payer, relevant
amendments are made to the state registry of VAT payers.
157.7. If the registration of VAT payer was annulled, the information on VAT
payer is erased for the state registry of VAT payers and issued registration
notification is re-called.
157.8. On the basis of official enquiries in cases defined under current Code, the
applicant can be issues with “Extract from the VAT payer registry. ( 9, 14, 16, 21
)

Article 158. Cancellation of registration 158.1. If taxpayer ceases his/its activity charged for V AT, he/it shall be obliged to
place an application for the cancellation of registration on VAT. In such case the
cancellation of registration for the purposes of VAT shall enter into force from the
date when taxpayer’s taxable operations are ceased.
158.2. Taxpayer who/which has registered voluntarily and whose total taxable
operation during the preceding 12 months do not exceed the volume equal to
75000 manats may apply for the cancellation of registration at any time within
one year after his/its last registration for VAT purposes, with exception of
situations stipulated by ar ticle 158.1. of this Code. The cancellation of registration
for VAT purposes shall enter into force from the date of submission of application
to the tax authority on cancellation of registration.
Tax authority shall send to relevant executive authority the information on cancellation
of VAT registration within one business day.
158.3. The tax agency shall remove from the registry of VAT payers the name
and other details concerning the person whose registration for VAT purposes has
been cancelled. ( 6, 9, 14, 16, 21, 24
)
Article 159. Taxable bases
159.1. Provision of goods, works, rendering of services and taxable import are
subject to taxation.
159.2. Taxable transactions shall include, along with the furnishing goods,
performing work and ren dering services that are exempt from tax under this
Section`s provisions, any furnishing of goods (including fixed assets),
performance of work and rendering of services within the framework of a joint
economic activity carried out without the creation of a legal entity, provided that
they are conducted in the territory of the Republic of Azerbaijan pursuant to
Article 168 and 169 of this Code. Performance of works and provision of services
outside the territory of the Republic of Azerbaijan shall not be included in taxable
operations in accordance with article 168 of this Code.
159.3. Import of goods shall, with the exception of the import exempted from tax
pursuant to this Section, be considered taxable as import. Goods that are
temporarily imported by tra nsit or goods that are not considered imported goods
pursuant to customs legislation shall not be considered importation goods for
VAT purposes.
159.4. Taxpayer’s supply of goods, performance of works and provision of
services (including on a non- compensated basis) to its own employees or for non-

economic activity, as well as barter operations shall be viewed as a taxable
operation.
159.5. If tax payer makes a purchasing of goods (works, services) by paying the
VAT and receives or holds the right to receive a credit, the use, loss, damage or
theft of goods, with exception of emergency situations of such goods (works,
services) for non-commercial activity shall be considered as a taxable operation.
159.6. If taxpayer’s registration is cancelled, the goods that remain in his/its
ownership at the time of cancellation shall be considered goods realized at such
time and within the limits of a taxable operation.
159.7. Regardless of other provisions of this article, the delivery of goods by the
person who made the purchase of goods in the result of VAT taxable operations
but does not hold the right for VAT compensation on the basis of article 175 of
this Code, shall not be considered as taxable operation. If partial VAT
compensation was not provided during purchasing the amount of taxable
operation proportional to the uncompensated part.
159.8. VAT operations by persons not registered as VAT payers as well as their
operations released from VAT or zero (0) VAT rate, but conducted with
application of VAT shall be subject to taxation.
159.9. Minimum turnover taxable for VAT purposes shall be calculated by persons
engaged in activities on apartment construction, via application of rates set by the
relevant executive authority by territorial zones of cities and districts of the country, to
the amount of 225 manats for each square meter of the taxable facility, as per Article
219.1.2 of this Code. (3, 6, 16
, 21)
Article 160. Provision of enterprise
160.1. Provision of all assets of the enterprise or independent subdivision of the
enterprise by one taxpayer to the other taxpayer within one operation shall not be
considered the taxable operation.
160.2. In the case indicated in article 160.1 of this Code the person who
purchased or accepted the enterprise (the independent subdivision of the
enterprise) shall accept all rights and obligations related with this enterprise of the
person who provided the enterprise. This provision shall not relieve the person
who provided the enterprise (independent subdivision of the enterprise) from the
payment of taxes, interests or financial sanctions associated with previous periods.
160.3. This article shall only be applied if parties providing and purchasing
(accepting) the enterprise (independent subdivision of the enterprise) inform the
tax authority in writing on application of provisions of this Article not later than
within 10 days from the provision of enterprise. (11)

Article 161. Value of a Taxable Operation
161.1. The value of a taxable operation (including any duties, taxes and other fees
(without th e consideration of VAT) shall be determined on the basis of the
amount of the fee which is paid or payable to taxpayer by customer or any other
person.
161.2. If taxpayer receives, or is entitled to receive, goods, work or services in
exchange for a taxabl e consideration, the market value (without the consideration
of VAT) of such goods, works and services (including any duties, taxes and other
fees) shall be included in the value of the taxable operation.
161.3. Pursuant to Articles 159.4., 159.5. and 159.6. Code, the amount of the
taxable operation shall be equal to the cost of such goods, work or services
(including any taxes and payable duties), without the consideration of VAT. The
cost of taxable operation shall be determined in accordance with the pro cedure
established in article 159 of this Code. This procedure shall be applied during the
cancellation of registration in accordance with article 159.6. of this Code.
Article 162. Volume of the Taxable Import
162.1. The volume of the taxable import shall consist of the value of the goods
determined in accordance with the customs legislation of the Republic of
Azerbaijan and taxes and duties (without the consideration of VAT) to be paid
after these goods are imported to the Republic of Azerbaijan.
162.2. W hen rendering a service, which is considered a part of import pursuant to
Article 171.2. of this Code, the value (without the consideration of VAT) of such
service shall be added to the value stipulated in Article 162.1. of this Code.
Article 163. Adjustme nt of the Taxable Turnover
163.1. This Article shall apply to the operations on provision of goods, works and
services in the following cases:
163.1.1. the operation is fully or partially cancelled, including the full or
partial return of goods;
163.1.2. the nature of operation has changed;
163.1.3. the agreed compensation (advance payment) for the operation has
been altered because of the reduction of prices or any other reason;
163.1.4. new facts supporting the adjustment of the taxable income arise
after the submission of electronic tax invoice by taxpayer and such
adjustment is effected in the relevant instructions.

163.2. If, as a result of any of the cases stipulated in Article 163.1., taxpayer
163.2.1. has submitted invoice for VAT and has not correc tly indicated the
tax amount in that electronic tax invoice;
163.2.2. has not correctly indicated the VAT amount in VAT tax return,
adjustments shall be effected in accordance with Article 174.2. and 175.5.
of this Code. The adjustment shall be effected in the tax period in which
the change in assessment occurred.( 24
)
Article 164. Exemption from tax
164.1. Along with the export of goods, the following types of the reali zation of
goods, performance of work and provision of services, as well as the following
types of import shall be exempt from the payment of VAT:
164.1.1. the value of state enterprise property purchased within
privatization program; as well as part of the rent payment for leasing of
state property, which shall be paid to the budget;
164.1.2. provision of financial services (including the financial leasing);
164.1.3. supply (sending) and import of the national and foreign currency
as well as of securities ( except for numismatic purposes);
164.1.4. import of gold and currency valuables to be deposited with the
Central Bank of the Republic of Azerbaijan, as well import of monetary
means, anniversary coins and other similar valuables of the Azerbaijan
Republic, manufactured abroad;
164.1.5. investment of any property in the form of share into the charter
fund (capital) of enterprise, with exception of imported property
(investment of property as a share, if it is not directly related to obtaining
of other proper ty);
164.1.6. state fees, payments for permits, charges levied by state power
authorities, local management authorities and other authorized agencies
and services provided by the above in the exchange of amounts received,
fee charged by private notaries (f or the conduct of notarial acts and
services provided in connection with a notarial acts), within withheld
amounts.
164.1.7. purchasing of goods, execution of works and services as well as
their export on the expense of credits and loans international
organizations, governments of foreign countries, on the expense of credits
and loans provided by foreign legal and natural persons on the basis of

intergovernmental and interstate agreements, as well as the share of
Azerbaijani party if such share not exceeds 49 percents in projects
implemented on the expense of such credits and loans;
164.1.7. turnover on all types of purchasing and sale of mass media
products, editing, publishing, polygraph activity connected with
production of mass media publishing (with exception of advertisement
services);
164.1.8. editing, publishing, polygraph activity related to the production of
text -books for schools, children literature and state publishing funded by
state budget;
164.1.9. ritual services of undertaking bureaus and c emeteries;
164.1.11. import of property which is the a part of financial leasing;
164.1.10. import of goods, provision of works and services by the Central
Bank of the Azerbaijan Republic and the State Oil Fund of the Azerbaijan
Republic, connected with obligations stipulated by legislation;
164.1.11. operations on provision of fixed assets of any kind, movables
and other assets to the State Oil Fund of the Azerbaijan Republic or party
representing the Azerbaijan Republic, the transfer of which to the
Azerbaijan Republic, including the legal entities representing it, are
stipulated according to agreements on exploration, development of oil -gas
resources and production sharing, export pipelines and etc.;
164.1.12. services on transportation of passengers by U nderground;
164.1.13. provision of paid pre -school educational services (except for the
provision of services in connection with other activities);
164.1.14. operations on the value of assets set by articles 106.1.9- 106.1.11
of this Code and their provision in any form.
164.2. Relevant executive authority shall be entitled to grant the VAT exempt for
import of goods and equipment used for production purpose, providing advance
technologies, stipulated for specific period with provision of development of
specific area, in the event of impossibility to satisfy the production needs from
local resources. ( 3, 6, 9, 13, 16, 24, 27, 30
)
Article 165. Taxation at a zero (0) rate
165.1. Zero (0) rate VAT shall be applied for the provision of following works,
services and transactions:

165.1.1. Goods and services intended for use of diplomatic and consular representations
accredited in the Azerbaijan Republic of international organizations and foreign states,
as well as for personal use of diplomatic and administrative-technical associates of
certain rank, who are not the citizens of the Azerbaij an Republic, as well as their family
members;
165.1.2. import of goods, provision of goods, implementation of works and
provision of services to grant recipients on the expense of financial aid
(grants) received from abroad;
165.1.3. Export of goods and s ervices specified in Article 168.1.5 of this
Code;
156.1.4. international and transit cargo and passenger transportation’s,
except for international postal services. Fulfillment of works, rendering of
services directly connected with international and transit flights;
165.1.5. delivery of gold and other valuables to the Central Bank of the
Azerbaijan Republic;
165.1.6. purchasing of goods (works, services) and their import at the
expense of credits and loans of international entities, governments of
foreign states, as well as at the expense of credits and loans, provided by
foreign legal entities and natural persons on the basis of interstate and
intergovernmental treaties, by the persons receiving such credits and
loans, as well as if the share of the Azeri party does not exceed 49 percent
in projects, implemented by these credits and loans.
165.2. According to the article 165.1.1 of this Code, Zero (0) rate VAT will be
applied to countries imposing Zero (0) rate VAT to works, services and
operations specified in the article 165.1.1. ( 3, 6, 9, 21, 24
)
Article 166. Date of Taxable O perations
166.1. Unless otherwise provided for in this Article, the time of a taxable
operation shall be the time when VAT electronic tax invoice is submitted for that
operation. If a VAT electronic tax invoice is not submitted within five days from
the d ates stipulated in Articles 166.1.1. and 166.1.2. of this Code, the taxable
operation shall be considered to have been carried out at the following time:
166.1.1. at the time of the supply or realization of goods, performance of
works or provision of servi ces;
166.1.2. if supply of goods involves their transportation — at the time
that the transportation started.

166.2. If the payment has been effected before the time stipulated in Articles
166.1.1. and 166.1.2. where the a VAT electronic tax invoice has not been
submitted within five days from the payment, the taxable transaction shall be
considered to have been carried out at the time of payment. If two or more
payments are made for a taxable consideration, each payment shall be deemed as
a separate tran saction, within the limits of the payment amount.
166.3. If services are rendered on a regular or continuing basis, the time of
rendering services shall be the time when a VAT electronic tax invoice is
submitted for any part of the operation, or, if payment has been made, at the time
when any part of the operation has been paid for.
166.4. Where the provisions of Articles 159.3. and 159.5. of this Code are
applied, the time of carrying out a taxable operation shall be the time when the
use, or production of the goods, works and services begins. In the cases stipulated
in Article 159.4. of this Code, the time of carrying out a taxable operation shall
the time when goods are supplied, works are performed and services are provided
for employees. Where the provi sions of Article 159.6. are applied, the time of the
supply of goods shall be the time immediately preceding the time when the
cancellation takes effect.( 24
)
Article 16 7. Place of transfer of goods
The transfer of goods shall be deemed to take place at the place they are
transferred. If conditions of supply involve lifting and transportation, the transfer
shall be considered to be effected at the time when the lifting o r transportation of
the goods starts. If, however, the supplier is to install or fix up the goods, the
transfer shall be considered to be effected at the place the goods are installed or
fixed up.
Article 168. Place of performing works or rendering services
168.1. For the purposes of this Chapter the place of the performance of works
(provision of services) shall be as follows:
168.1.1. the place where immovable property is located — if works
(services) are directly connected with that property . Such words (services)
shall be considered construction, installation, maintenance, refurbishment
words, agent and expert services, rel ated to immovable property and other
similar works (services);
168.1.2. the place where the works are performed (services are rendered)
actually — if they are connected with movable property;

168.1.3. the place where services are actually rendered — if they are
rendered in the area of culture, arts, physical fitness or sports, or in another
similar area;
168.1.4. the place where transportation is actually provided- if works
(services) are directly connected with that property;
168.1.5. location of regis tration place of the entity buying works or
services, and if works or services are directly linked with permanent
representation of the buyer – location of such permanent representation.
Provisions of this article shall be applied to following services:
 transfer of ownership or transfer of rights on the use of patents, licenses,
trade marks, copyrights and other similar services;
 provision of advertisement, legal, accounting, engineering services as well
as data processing and similar services;
 provision of services on workforce;
 leasing of movable property (with exception of transportation means of
transportation enterprises);
 services of agent who on behalf of the main party of agreement invites
legal or natural persons for the provision of services spe cified in this
article;
 provision of telecommunication services (receiving, transmission and
distribution of signals, documents, photos, voice or information of any
kind via telegraph, radio, optic or other electromagnetic system, including
obtaining or granting rights for such transmission, receiving and
distribution shall be considered telecommunication services;
 services on radio and television transmission, postal services;
 provision of services via computer, Internet and other electronic networks,
e-mail and other similar means or granting of rights to use such networks
or services.
168.1.6. the place of activity of the person who performs the work or
renders the services.
168.2. When applying the article 168.1. of this Code the place of execution of
work or rendering of service listed in more than one article shall be determined by
the first in order of articles’ list.( 6, 9, 16
)
Article 169. Taxation of non -residents
169.1. If a non- resident who has not registered for VAT purposes in the Re public
of Azerbaijan performs work or provides a service in the territory of the Republic
of Azerbaijan for a tax agent stipulated in Articles 169.2 or 169.5 of this Code, the

performance of work or provision of services for the purposes of this Chapter
shall be taxed in accordance with this Article.
169.2. For the purposes of this Article, any person registered for VAT purposes or
any resident legal person shall be considered a tax agent.
169.3. Where Article 169.1. of this Code is applied, the tax agent s hall charge and
pay VAT from the amount to be paid to non- resident. The amount of tax shall be
determined by applying the tax rate provided for in Article 173.1. of this Code to
the amount payable to non- resident (without VAT).
169.4. If the tax agent has been registered for VAT, the tax withheld shall be
payable at the time o filing of the VAT return for the month in which the
operation took place. The payment document verifying the payment of the
calculated tax shall be considered to be a electronic tax invoice giving the tax
agent the right to a VAT credit according to Article 175 of this Code.
169.5. If the tax agent has not been registered for the VAT purposes, he shall pay
upon payment of calculated tax to non- resident in accordance with this Article
w ithin 7 days and before the 20
th of following month submit the VAT declaration
in accordance with the form approved by relevant executive authority. Amount to
be paid to non- resident by the tax agent in accordance with this Code shall not be
assigned to taxable operations, defining operation for calculation of VAT for
registration of tax agent for VAT purposes. If the tax agent has made the payment
to the budget of VAT calculated on the amount to be paid to non- resident, the
payment document shall contain t he note on payment of tax from the amount to be
paid to non- resident.
169.6. When property owned by non- resident is imported, the tax agent shall be
entitled to claim, upon the permission of non- resident who/which is the owner of
property, a VAT credit to the tax withheld from the importation. In this case the
tax agent shall be considered taxpayer and be responsible for the payment of VAT
when further realizing (except for exporting) that property.
169.7. The tax agent no later than within 20
th of the following month upon the
payment to non- resident, shall submit to the tax authority the declaration on
payment of VAT in accordance with the form established by the relevant executive
authority. ( 6, 9, 24
)
Article 170. Time of Import
An import of goods shall be considered to take place at the time when customs
duties are collected on such goods pursuant to customs legislation. If goods are
exempt from tax, an import of goods shall be considered to take place when such
goods are removed from the customs c ontrol.

Article 171. Mixed operations 171.1. Supply of goods, performance of works or provision of services that is
subsidiary to the main supply of goods, performance of works or provision of
services shall be considered a part of such operations.
171.2. Performance of work or provision of services by an exporter, which are
subsidiary to the import of goods, shall be considered a part of the import of
goods.
171.3. When operation which involves independent elements is divided into
taxable but VAT exempted operations those shall be considered as separate
operations.
Article 172. Operations by Agent 172.1. Supply of goods, performance of works and provision of services by a
person who is an agent (proxy) for another person (principal) shall be considered
an operation conducted by principal.
172.2. Article 172.1. of this Code shall not apply to services rendered by agent to
principal.
172.3. Article 172.1. of this Code shall not apply to the supply of goods to the
Republic of Azerbaijan by a person who/which is a resident agent of a non –
resident person not registered for VAT in the Republic of Azerbaijan. In such
cases supply of goods shall, for the purposes of VAT, be considered to be carried
out by an agent.
The amount of VAT that shall be paid on lotteries, tourist agency services,
commission sales, sell of used goods, and other areas, determination of taxable
base of which in accordance with general rules involves difficulties, shall be
determined in this Article.
172.4. The basis for VAT taxation on operat ions performed via the agent of other
person, shall be defines as follows:
172.4.1. During provision of goods, implementation of works or provision
of services via the agent of other person, the price of indicated goods
(works, services) shall be recognize d as a price of taxable operations and
basis for taxation.
Award (Premium), paid to the agent for provided services, along with inclusion
into the taxable operation of the agent, shall be assigned for costs deducted from
the income of other party.

The invoice received by the agent from other person does not allow him to
compensate the amount of VAT.
172.4.2. The time of taxable operations for other person shall be
considered the time of transfer to the agent of goods (works, services).
In the event of trans fer of goods (works, services) in batches (parts) the time of
taxable operations is established for each batch.
172.4.3. If the agent is the VAT payer he shall submit only the tax receipt
on services provide to other person. The tax receipt shall entitle t he other
person, who is the payer of VAT to compensate the paid VAT to the agent.
Irrespective of VAT inclusion to the cost of goods (works, services) delivered to
the agent by other person, the agent shall not be entitled to issue electronic tax
invoice t o the buyer (customer) of the goods (works, services).
172.4.4. For the agent the taxation basis shall be the value of services
provided by him to other persons on provision of goods (works and
services), the time of taxable operations is an actual time for provision of
these services, and the value of taxable operations is the award
(premium), which he shall obtain (obtained) from other party.
172.5. In operations of other person, implemented via the agent, specific of VAT
calculation shall be defined as f ollows:
172.5.1. Value of taxable operations for persons implementing the lottery,
shall be the amount remained after deduction of the amount of prize fund
from the amount, received from sale of lotteries.
172.5.2. If in accordance with provisions of lotte ry the prize fund is
completely or partially comprised of goods, the amount of VAT paid for
goods, purchased for prize fund is not compensated.
172.5.3. The basis for taxation of parties providing tourist services on
routes, starting from the territory of the Azerbaijan Republic to other
countries (with exception of services, provided outside of the Azerbaijan
Republic), shall be the value of tourist services, and for persons (agents),
providing tours, the value of services provided for their supply.
172.5.4. The basis of taxation for committent during sale of goods in
commission shall be the value of goods, transferred to the commissioner
(with deduction of commissions).
172.5.5. The electronic tax invoice of the commissioner, transferred by the
committent, does not entitle the commissioner to pay the VAT amount.

172.5.6. The commissioner, independent whether the VAT is included in
the value of commissioned goods, can not transfer the electronic tax
invoice to the buyer of goods.
172.5.7. If the committent is non-resident, in accordance with Article
172.3 of this Code good sales operations are recognized as operations
conducted by the agent, thus commissioner.
In this instance the taxation base for the commissioner shall be the amount of
goods, sold under the commission, as well as value of services, provided to the
commissioner. Amount of taxable operation of the commissioner — is the sale
price (without VAT), established by the committent for goods, sold under the
commission, and award (premium) for servic es, which was received from the
committent for services provided.
For the commissioner the time of taxable operations shall be the time of provision
to the purchasers (clients) of goods (works, services). In the event of transfer of
goods (works, services) in batches (parts) the time of taxable operations is
established for each batch.
If the commissioner has paid to the customs authorities the VAT for imported
goods, documents verifying the implementation of this obligation shall entitle the
commissioner, who is the VAT payer to compensate the price of this VAT. If the
commissioner is a taxpayer, goods, provided under the commission shall be
subject to VAT on general basis.
If goods imported under the commission were not sold by the commissioner, who
is the payer of VAT, and by the assignment of committent completely or partially
transferred to other person on the territory of the Azerbaijan Republic, the
amount for the unsold part of goods from the amount paid to customs authorities
for VAT, shall be paid by the commissioner to the budget.
172.5.8. During implementation of taxable operations, performed by other
person via agent, transfer of VAT to the budget, compensation of VAT
during the determination of payments to the budget and application of
electronic tax invoices, with consideration of provisions of this Article
shall be defined on general basis in accordance with this Code.
172.6. I f persons, who are subject to VAT except operations specified in this
Article perform any other operations, registration of such additional operations
shall be performed separately.( 9, 24
)
Article 173 . VAT rate
173.1. VAT shall be 18 percent of each taxable operation and taxable import.

173.2. The taxable turnover shall be the total value of taxable operations during
an accounting period.
Article 174. VAT on taxable turnover payable to the budget 174.1. The sum of VAT payable to the budget in respect of taxable turnover in
accordance with Article 166 of this Code shall be determined as the difference
between the sum of tax charged in accordance with article 173.1. of this Code on
the taxable turnover and the sum of tax creditable under Article 175 of this Code.
174.2. In the event that VAT payable under Article 163 of this Code exceeds the
VAT indicated in taxpayer’s tax returns, the difference shall be considered a
VAT payable during the accounting period in which cases stipulated in Article
163.1. of this Code and shall be added to the tax amount payable in the
accounting period pursuant to Article 174.1. of this Code.
Article 175. VAT creditable in the determination of payments to the budget 175.1. Subject to the provisions of this Article, the amount of tax paid to the
deposit account of VAT as per payments and operations performed within such
account made by cashless transfer (with exception of payments made in cash to
the bank account of the provider of goods, works and services) on invoices issued
to taxpayer shall be considered the amount of credited VAT and in this case the
time for imposing tax on the following operations shall be taken into account:
175.1.1. on operations involving supply of goods, performance of works
and provision of services which are considered operations conducted
during an accounting period pursuant to Article 176 of this Code;
175.1.2. on import of goods during an accounting period pursuant to
Article 170 of this Code.
175.1.3. if in accordance with invoice issued to the taxpayer two or more
payments have been made, each payment shall be considered as
performed for separate operations at the value of payment. The amount of
VAT shall be paid for in accordance with procedure set by this Code and
the relevant executive authority not later then on the day of payment of the
value of goods (works and services), purchased by electronic tax invoice,
issued to the taxpayer. If in this two or more payments are made of the
value of goods (works and services), the amount of VAT shall be paid via
VAT deposit account in accordance with amount of payment made.
When the cost for goods, works and services is not included in the production
expenditures, for the use of such goods, works and services for commercial
purposes provisions of articles 175.1., 175.1.1., and 175.1.2. of this Code shall be
applied.

175.2. The amount of VAT paid by cashless transfer by VAT deposit account
(with exception of payments made in cash to the bank account of the provider of
goods, works and services) by the taxpayer on invoices submitted for taxable
operations, which are partially used for entrepreneur services and other part for
other purposes, as well as on the import of goods compensating the amount of
VAT determined by the weight of goods (works, services) used for
entrepreneurial activity.
175.3. No VAT compensation shall be made for costs stipulated in article 109.3.
of this Code, with the exception of specified in article 109.4. of this Code.
175.4. In the case where taxpayer carries out taxable operations and operations
exempt from tax pursuant to Article 164 of this Code, the amount allowed as a
VAT credit shall be determined on the basis of the proportion between the taxable
and total turnover.
175.5. If under circumstances indicated in Article 163 of this Code the amount of
VAT to be paid to the budget is not indicated correctly, the amount of VAT to be
paid to the budget shall be indicated in the declaration, provided by the taxpayer
for reporting pe riod, in which such circumstances have occurred.
175.6. In cases when goods (works, services) are bought by the persons carrying
out operations, exempted from VAT or not liable to VAT, the amount of VAT paid
in an order stipulated by this Article, is not l iable to compensation.
175.7. Operations, as per which VAT is deducted at Zero (0) rate, are considered
the operations liable to VAT, and VAT amount, paid by cashless transfer by VAT
deposit account (with exception of payments made in cash to the bank account of
the provider of goods, works and services) when buying goods (works, services)
by the persons, carrying out such operations are to be compensated according to
the provisions of this Code.
175.8. Registration of parties released from VAT at various s tages of operation
under Article 164.1.7. of this Code shall be implemented in accordance with
procedures, established by the relevant state executive authority.
175.8. In purchasing of goods, services (works) by VAT payers, as well as non-
registered legal entities for VAT purposes and budget organizations, with more
than 50 percent of state ownership, amount of VAT on issued electronic tax
invoices shall be paid to VAT deposit account. Rules for maintenance of the VAT
deposit account, VAT movements, compensation for VAT with operations
performed on this account and their payments to state budget shall be set by the
relevant executive authorities. ( 3, 6, 9, 21, 24
)
Article 176. Electronic tax invoices

176.1. Subject to the provisions of article 176.4. of this Code, a person registered
as VAT payer and conducting a taxable operation shall be obliged to issue a
electronic tax invoice to the person receiving goods, works and services. A person
who is not registered for VAT has no right to issue a electronic tax invoice.
176.2. A electronic tax invoice being a form of strict reporting , drawn up on the
pro-forma determined by the relevant executive authorities and contain the
following information:
176.2.1. last name, initials or name of taxpayer and purchaser (customer);
176.2.2. identification number of taxpayer and purchaser (customer );
176.2.3. name of the goods supplied, works performed and services
rendered;
176.2.4. amount of the payment for the taxable operation, as well as
volume of the taxable operation;
176.2.5. excise amount on excise goods;
176.2.6. tax amount payable on the given taxable operation;
176.2.7. date of issuing the electronic tax invoice;
176.2.8. number of the electronic tax invoice;
176.2.9. name of the tax authority that issued the registration notification
of the taxpayer registered for VAT purposes, date of i ssuance and number
of notification;
176.2.10. position, full name of the executive who signed the invoice.
176.3. Taxpayer shall be obliged to draw up and issue to purchaser of the goods
(works or services) a electronic tax invoice upon delivery or not lat er than 5 days
after the delivery thereof.
176.3- 1. Terms of application, registration and use of electronic tax invoices shall
be established by relevant executive authority.
176.4. In the case of the supply of goods, performance of works or provision of
services at retail to purchasers (customers) that are not VAT payers, a cash receipt
or a simplified form of invoice prescribed by the relevant executive authorities
may be used instead of a electronic tax invoice. Receipts, checks that were not
ordered, printed and developed in accordance with established procedures,
electronic tax invoice, registration documents for cash operations can not be used

as basis for tax compensation for the purposes of Article 175 of this Code and
independent of provisions of other articles of this Code the payment made shall be
considered invalid.
176.5. Import documents provided by customs authorities and confirming the
payment of import tax independent of form of payment shall provide the basis for
tax compensation for the purposes of Article 175 of this Code. ( 6, 9, 11, 24
)
Article 177. Filing of tax returns and payment of VAT
177.1. Each VAT payer shall be required:
177.1.1. to fil e a VAT return with a tax agency for each accounting period;
177.1.2. to pay tax for every accounting period within the term established
for the filing of VAT.
177.2. A tax return shall be submitted for each accounting period not later than
the 20
th day of the month following the accounting period.
In case of liquidation of a legal person- taxpayer or if activity of a physical person
engaged in business undertakings without having established a legal person is
terminated, a VAT declaration should be submitte d to the tax authority within 30
days provided that it is not later than the term provided by this Code. In this case,
tax period shall cover the period from the beginning of a term considered as
accounting period till the date when the taxpayer stopped hi s activity.
177.3. Articles 177.1 and 177.2 of this Code shall not apply to persons who are
taxpayers only on the import of goods pursuant to Article 154.3. of this Code.
177.4. VAT on taxable import shall be calculated and collected by customs
agencies in the manner established for the payment of customs duties pursuant to
this Code and customs legislation.
177.5. During the registration for previous dates in accordance with article
157.3.3. of this Code the taxpayer shall be obliged to pay VAT from taxabl e
operations from the moment the registration had entered into force and shall hold
the right to for compensation of tax amounts in accordance with procedure
established by taxpayers. These operations shall be deemed as implemented
within the month in whic h the declaration was submitted. In such event the
taxpayer shall hold the right to submit VAT electronic tax invoices for operations
that were reflected in declaration.
177.6. VAT shall be paid to the state budget.( 14, 24
)
Article 178. VAT accounting period

A VAT accounting period shall be a calendar month.
Article 179. Relations wi th the budget when the amount of creditable tax exceeds the
amount of calculated tax
179.1. With respect to taxpayer whose taxable turnover taxed at a zero rate is at
least 50% – the credited tax amount which exceeds the calculated tax amount in
the accou nting period shall be returned by the State tax agency within 45 days
after the receipt of taxpayer’s application.
179.2. With respect to other taxpayers — the credited tax amount that exceeds
the calculated tax amount in the accounting period shall be carried forward to the
following 3 months and credited against the payments of that period. Any balance
of the excess payment shall be refunded from the treasury within 45 days after
filing a tax return for that period.
179.3. In any case when certain amounts are refunded to taxpayer erroneously, the
tax agency may demand the return of such amounts according to the procedure
established for the collection of tax.( 14
)
Ar ticle 180. Liability of Taxpayers and Supervision by Tax Authorities
180.1. Taxpayers and their officials shall be liable for calculating the VAT
correctly and paying it to the Treasury in a timely manner. They shall also be
liable for filing tax returns with tax authorities within the established term,
pursuant to the tax legislation of the Republic of Azerbaijan or, in the event VAT
collection is vested in customs authorities, pursuant to customs legislation of the
Republic of Azerbaijan.
180.2. Administ ration and supervision with respect to tax collection shall be
carried out by State taxation and customs authorities, within the power vested in
them, in accordance with this Code and customs legislation of the Republic of
Azerbaijan.
Article 181. Refund o f VAT in the case of a free grant
181.1. A person who receives goods or benefits from work or services provided
free of charge by an international organization, foreign legal entity or physical
person pursuant to international or intergovernmental agreeme nts to which the
Republic of Azerbaijan is a party, shall be entitled to a refund of the VAT paid on
said goods, work or services, within 45 days upon submitting electronic tax
invoices to tax authorities.
181.2. The refund shall be made only if the reques t for the refund is filed before
the end of the month following the month in which the taxable operation or the
taxable import takes place.

Note: If as of 1 January 2003, the total amount of taxable operations of the
taxpayer does not exceed 5000-fold size of non- taxable amount of monthly income
for the previous 12 full calendar months, the taxpayer within 45 days can apply
for revocation of registration for VAT, except for cases stipulated by the Article
158.1 of the Tax Code of the Republic of Azerbaijan. Cancellation of registration
for VAT purposes shall be carrying out in accordance with the second sentence of
Article 158.2 and 158.3 of the Tax Code.

If the tax declarations submitted after the date of entry into force of the law в„ –
383 (1 January 2003) cover the activity relating to the period prior to January 1,
2003, then tax rates in effect during this period shall be applied.

If electronic electronic tax invoices for transactions undertake n by the taxpayer in
cash before January 1, 2003 and subject to VAT are reflected in the declarations
submitted to the tax authorities within the set deadline for the period in which
these operations were carried out, they give rise to a tax reimbursement. (6, 24
)
Chapter XII. Excise taxes
Article 182. Concept of excise
182.1. Excise shall be an indirect tax included in the sale price of excise goods.
182.2. Excise goods produced in or imported into the Republic of Azerbaijan shall
be subject to excise tax, except for goods that are exempt form tax.
Article 183. Taxpayers
183.1. Unles s otherwise provided for in this Chapter, all legal or physical persons
engaged in the production of excise goods in the Republic of Azerbaijan, or
importation of such goods into the Republic of Azerbaijan, as well as residents of
the Azerbaijan Republic i nvolved in the production of excise goods directly or via
contractor outside of the territory of Azerbaijan, who are not registered as
taxpayers at the manufacturing location of such goods, shall be payers of excise
tax.
183.2. With respect to goods produc ed from raw materials delivered by customer,
manufacturers (contractors) of goods shall be considered as excise taxpayers. In
such case the manufacturer (contractor) holds the right to request the
compensation for the amount of excise from the customer.
183.3. If the manufacturer of the excise goods and the customer are the resident
interdependent persons, then the owner of the goods (the customer) is payer of
excise taxes. (27)
Article 184. Taxable base

184.1. The taxable base shall be the following:
184.1.1. release of excise goods produced in the territory of the Republic
of Azerbaijan outside the boundaries of the building they were produced;
184.1.2. with respect to imported goods — a taxable operation shall
include an import of excise goods pursuant to the customs legislation of
the Republic of Azerbaijan.
184.2. For the purposes of this article the production facilities shall stores,
secon dary storage areas and other similar premises.
Article 185. Amount of taxable operation 185.1. With respect to oil products and tobacco products produced in the territory
of the Republic of Azerbaijan, the amount of the taxable consideration shall be
determined, excluding the VAT and excise amounts, on the basis of the
compensation (including barter) received, or receivable, by the taxpayer from a
customer or any other person, the amount of such compensation being not less
than the wholesale market price o f the relevant goods. Taxable operation for
other goods with excise tax produced in the territory of the Azerbaijan Republic
shall be considered as the amount of goods produced.
185.2. With respect to import goods (with exception of light vehicles, leisure and
sports yachts and other floating transports stipulated for these purposes) , the
amount of the taxable consideration shall be the customs value of the goods
determined in accordance with the customs legislation of the Republic of
Azerbaijan (but not le ss than the wholesale market price, excluding the excise and
VAT) plus the amount of duties and taxes payable on the import of goods into the
Republic of Azerbaijan (excluding excise and VAT).
Taxable operation on light vehicles, leisure and sports yachts and other floating
transports, specified for these purposes is their engine volumes.
185.3. Except for returnable containers, the price of the packaging shall be taken
into consideration when determining the amount of the taxable consideration.( 14 ,
16 )
Article 186. Date of the taxable operation
186.1. With respect to goods produced i n the territory of the Republic of
Azerbaijan, the time of the taxable operation shall be the time when the goods are
released outside the boundaries of the building they are produced.

186.2. With respect of the import of goods, the time of the taxable operation shall
be the time when the import is effected in accordance with the customs legislation
of the Republic of Azerbaijan.
Article 187. Taxation of export
Export of excise goods shall be taxed at a zero rate.
Article 188. Excise exemptions
188.1. The following shall be exempted from excise:
188.1.1. import of three liters of alcoholic beverage and three blocks of
cigarettes by a physical person for personal consumption and, with respect
to persons entering the territory of the Republic of Azerbaijan b y
automobiles, one tank of fuel stipulated by the technical passport of the
vehicle;
188.1.2. goods transported through the territory of the Republic of
Azerbaijan by transit;
188.1.3. temporary import of goods into the Republic of Azerbaijan,
except for g oods intended for re -export;
188.1.4. goods that are intended for re -export and secured under a pledge;
188.2. Exemptions from excise provided in Article 188.1. of this Code shall apply
only if the conditions for the exemption from customs duties are compl ied with.
If, for the purposes of customs duties, goods imported are subject to the regime of
the refund of the duty, or if the payment of the custom duty is required upon the
violation of the conditions of the exemption, such regime shall be applied to the
collection of excise taxes.
Article 189. Credit of excise for production needs 189.1. A person purchasing excise goods (raw materials) and using these goods
for the production of other excise goods shall be entitled to a credit in the amount
of the exci se paid on the purchase of the raw materials or to a refund of the excise
amount.
189.2. A credit or refund of excise according to this Article shall be allowed
provided that the producer of the raw materials submits a supporting electronic
tax invoice or, when importing raw materials, relevant documents. The amount
shall be returned to taxpayer within 45 days after the filing of a relevant document
with tax authorities.( 24
)

Article 190. Tax rates and the list of excise goods 190.1. Following goods shall be subject to excise tax:
 Alcohol, beer and all types of alcoholic beverages;
 Tobacco products;
 Oil products;
 Light vehicles (with exception of motor transport means for special
purposes, equipped with special markings and equipment);
 Leisure and sports yachts as well as other floating transports stipulated
for these purposes.
190.2. The relevant executive authority shall determine rates of excise tax for
excise good s imported into the Azerbaijan Republic (with exception of light
vehicles, leisure and sports yachts and other floating transports stipulated for
these purposes) .
190.3. To food alcohol, beer, alcoholic beverages and tobacco products, imported
to the territory of the Azerbaijan Republic, following excise rates are applied:
190.3.1. food alcohol (including ethyl alcohol non- denatured with alcohol
content of not less than 80 percent; ethyl alcohol non- denatured with
alcohol content of less than 80 percent) – 0.8 manats for liter;
190.3.2. vodka, strong drinks and strong beverage materials, liqueurs and
liqueur products – 0.5 manats per liter;
190.3.3. cognac and cognac products – 0.2 manats per liter;
190.3.4. sparkling wines – 0.2 manats per liter;
190.3.5. w ine and vineyard materials — 0.1 manats per liter;
190.3.6. beer (with exception of non- alcoholic beer) and other beverages
containing beer — 0.08 manats per liter;
190.3.7. all types of tobacco products – 12,5% .
190.4. Following excise rates are appl icable to light vehicles, leisure and sports
yachts and other floating transports stipulated for these purposes imported to the
Azerbaijan Republic:
Description of taxable object Excise rate
Light vehicles:
With engine volume up to 2000 cubic sm. For ea ch cubic sm. of engine volume
— 0.15 manat

With engine volume up to 3000 cubic sm. 300 manats + 1 manat for each cubic
sm. for the portion of engine 2001-
3000 cubic sm. of engine volume
With engine volume up to 4000 cubic sm. 1300 manats+ 2manats for each cubic
sm. for the portion of engine 3001-
4000 cubic sm. of the engine volume
With engine volume above 4000 cubic sm. 3300 manats + 4 manats for each
cubic sm. for the portion of engine exceeding 4000 cubic meters of
engine volume
Sport and leisure yachts and other floating transports used for
these purposes
1 manat for each cubic sm. of engine
volume В»
190.5. Excise rates on petroleum materials, light vehicles, leisure and sports
yachts and other floating transports stipulated for these purposes produced in the
Azerbaijan Republic shall be established by the relevant executive authority. ( 3, 9
,
14, 16 )
Article 191. Accounting period and payment of excise
191.1. The accounting period for excise shall be determined on the basis of
calendar month. With respect to the production of goods — when carrying out
taxable operations during each accounting period excise shall be paid no later than
20
th of the month following the accounting month.
191.2. If a taxpayer has fallen into arrears on excise tax for any period, the excise
tax shall, starting from the time that the arrears started until the time of settlement,
be paid when carrying out the taxable transaction. Moreover, the taxpayer shall
not have the right to remove the goods out of the building where the goods are
produced before said excise tax is paid on such goods.
191.3. When excise goods are imported excise shall be collected under the
procedure established for the collection of customs duties.
191.4. Excise shall be paid to the state budget.
Article 192. Filing of returns
192.1. In the cases stipulated in Article 191.1. of this Code, taxpayer shall be
required to file a tax return according to the procedure established by the relevant
central executive authorities within the term determined for the paymen t of the
tax, such return indicating taxable operation during each accounting period.
In case of liquidation of a legal person- taxpayer or if activity of a physical person
engaged in business undertakings without having established a legal person is
termin ated, an excise tax declaration should be submitted to the tax authority

within 30 days provided that it is not later than the term provided by this Code. In
this case, tax period shall cover the period from the beginning of a term
considered as accounting period till the date when the taxpayer stopped his
activity.
192.2. Excise taxpayer shall submit an application for a credit mentioned in
Article 189 of this Code together with the tax return.( 14
)
Article 193. Refund of excise during re- export
193.1. With respect to imported goods intended for further re -export, excise shall
be paid upon the import of the goods and be subsequently refunded, in the amount
corresponding to the actual quantity of the re -export, from the customs authorities
collecting that excise within 15 days.
193.2. Article 193.1. of this Code shall not apply to the import goods that are
exempted from the collection under Article 188.1.4. of this Code.
A rticle 194. The tax control over excise goods
194.1. The procedure for affixing excise stamps to goods, as well as import
goods, which are subject to excise under the established rate, shall be determined
by the relevant executive authority. Import, stora ge (except for storage of goods
of personal consumption) or sale of such excisable goods without a stamp shall be
forbidden and shall involve the responsibility envisaged by the legislation. State
tax authorities shall be required to confiscate, in the manner established by
legislation, goods to be so stamped which are sold without an excise stamp.
194.2. Tax authorities shall be entitled to prevent the export (issuance) of excise
goods outside of production boundaries without registration, marking and
paym ent of excise in case stipulated by Article 191.2. of this Code, in accordance
with procedure established via installation of control posts, measurement devices
and putting a seals in appropriate premises and stores (except for personal
premises), in case of establishment by taxpayers of violation of requirements
provided by this Code , of taxpayers that produce excise goods to be stamped, as
well as other measures.
194.2.1. Control posts are established by the decision of relevant
executive authority and shall be equipped with telephone and other
required equipment at access and exit gates of production sites of
taxpayers engaged in production of goods subject to excise.
194.2.2. In establishment of control posts the inspection of technical
integrity, compli ance with process equipment standards, instrumentation
and laboratory devices of taxpayers manufacturing products subject to
excise, their sealing shall be implemented by relevant executive authority.

194.2.3. Employees of control posts provide the inventory of remaining
excise marks, seal instrumentation on production measurement, raw
material and final product stores, process equipment at production sites,
as well as marking during the sell of products subject to marking, with
review of initial support documentation (receipt, bill of lading, electronic
tax invoice etc.), control their transportation from production sites,
transfer of final product to store and issuance to customers, compliance
with marking application rules.
194.2.4. Sealing of instrumentation on volumes of production, raw
material and final products stores, process equipment at production sites
shall be implemented by employees of control posts together with
manufacturer’s representative and performance of relevant records
in accordance with forms approved by tax authority, including the records
of instrumentation on volumes of production at the day end, break between
the shifts, as well as in the event of suspension of validity of licenses or
their cancellation, absence of excise marks for marking of final products,
absence of raw materials, support and packaging materials, as well as in
the event of long- term stand-by of equipment for technical reasons.
194.2.5. Shutting of production capacities in the event of suspension of
production s hall be performed by sealing of process lines and equipment
at places to make their use impossible.
194.2.6. Sealing and removal of seals shall be documented by the relevant
act with participation of control post employees and manufacturer
representative.
194.2.7. If during the commencement of the operations control post
employees are absent, seals can be removed by responsible employees of
the manufacturer informing the tax authority, and relevant protocols shall
be made with indication of reasons and date .
194.2.8. Employees of control posts shall check the conformance of
quantities, volumes, weights specified in documents issued for sells of
products with their actual numbers, volumes and weights and indicators in
documents shall be registered in dedicate d logs. Upon this the employees
of control posts on initial confirmation documents of goods (receipts, bills
of lading, electronic tax invoice etc.) shall authorize the issuance.
194.2.9. In the event of changes to indicators of instrumentation, damage
to seals on process equipment within the period between application of the
seal and its removal, found deviations in marking of production by excise
marks, as well as delivery of final products outside of the production site
with violation of Article 191.2 of this Code employees of control post shall
develop the relevant protocol and immediately inform the tax authority.

194.3. Rules for control of excise goods to be marked in accordance with Article
194.2 of this Code shall be established by the relevant executive authority. ( 6, 7 ,
14, 16, 24 )
Article 195. Electronic tax invoices
195.1. Subject to the provisions Article 195.3. of this Code, taxpayers supplying
excisable goods shall write out and issue electronic tax invoices to the receivers
of the goods in accordance with the existing instructions.
195.2. A electronic tax invoice shall be an invoice drawn up in the pro -forma
established by the relevant central executive authorities and reflecting such
information as stipulated in Article 176.2. of this Code.
195.3. When goods are supplied on a retail basis simplified invoices may b e used
instead of electronic tax invoices.(24
)
Chapter XIII. Property Tax
Article 196. Taxpayers
The payers of property tax are the physical persons and enterprises specified in
article 197 of this Code being the objects of taxation. (3)

Article 197. Taxable base 197.1. Following shall be a taxable base:
197.1.1. The value of buildings and their parts (hereinafter referred to as
buildings) as personal property of resident or non -resident physical person
in the Republic of Azerbaijan, as well as value of automobiles and moving
equipment (hereinafter referred to as transport means) , any water and air
transport facility owned by a physical person, irrespective of where they
are located and whether or not they are used;
197.1.2. transport means on the balance of enterprises;
197.1.3. average annual value of fixed assets on the balance of enterprises;
197.1.4. for enterprises -non- residents, carrying out the business activity
by permanent representation in the Azerbaijan Republic, – only the
average annual value of fixed assets connected with permanent
representat ion.
197.2. The value of the assets that constitute a taxable base and are accumulated
by enterprises for carrying out a joint activity without creating a legal entity shall

be included in the tax return for the purpose of taxation by the joint activity
participants consolidating such assets. The value of the fixed assets created
(acquired) as a result of the joint activity shall be included in the tax return in
accordance with the participating shares in the property determined under contract
by the joint activity participants.(3, 6
, 11)
Article 198. Tax rates
198.1. Physical persons shall pay the property tax in following order and at
following rates:
198.1.1. from the inventoried value of the building in their ownership:
 the tax not to be levied if the value does not exceed the sum of
5000 manats. The rate of 0.1 % shall be levied from the amount
exceeding 5000 manats.
198.1.2. for water and air transport facilities:
198.1.2.1. 0.02 manat per 1 cub. sm. of the water transport
facility’s engine;
198.1.2.2. 0.02 manat per 1 cub. sm. of the air transport
facility’s engine;
198.1.2.3. 1% of the market value for water and air transport
facilities without engines.
198.2. Enterprises shall pa y tax at the rate of 1% of the value of the fixed assets
determined under Article 202 of this Code.
198.3. Natural persons and enterprises shall pay the property tax for automobile
transport facilities for the engine volume of such facilities (for 1 cub.sm ) at
following rates.
Taxable facility In percentages of conventional financial unit
Light vehicles 0.2
Buses and cargo vehicles 0.4
198.4. Tax rates indicated in articles 198.1. and 198.2. of this Code shall be
applied to the residual value of property .( 6, 9, 11, 14, 16 )
Article 199. Tax privileges and exemptions

199.1. Budget-funded institutions and organizations, state power and governing
bodies, the Central Bank of the Republic of Azerbaijan and its offices, state funds
and public entities for disabled people, children with limited levels of health;
199.2. Buildings of art workshops or parts of buildings where such workshops are
located that belong to natural persons involved in entrepreneurial activity without
establishing the legal entity on craft production of copper, tin and pottery
products, house appliances, gardening instruments, national music instruments,
toys, souvenirs, house appliances made of reeds and cane, involved in embroidery
and production of house appliances from wood shall not be taxed;
199.3. The amount of property tax that shall be paid by persons indi cated in
article 102.2 of this Code, as well as people on pension or obligatory military
service, their family members for the period of such service shall be reduced for
the amount of 30 manats , with exception of cases of their leasing, rent or use for
en trepreneurial or other commercial activity.
199.4. For the purposes of taxation the value of enterprise property shall be
reduced for the amount of value of following facilities:
199.4.1. facilities used for the purposes of environment, fire protection and
civil defense;
199.4.2. product lines, railways and motorways, communication and
power lines, melioration and watering facilities;
199.4.3. Automobile transport that shall be taxed in accordance with
article 211.1.2 of this Code;
199.4.4. facilities of enterprises involved in education, health, culture and
sports that used only for the purposes of such areas of activity;
199.4.5. fixed assets, amortized in accordance with Article 114.3.2. of this
Code.
199.5. Trolley buses and tramps used for the transportation of passengers in cities
shall be exempted from property tax.
199.6. The amount of property tax that shall be paid for automobile transport
means of persons indicated in article 102.2. of this Code shall be reduced for 10
times of conventional financi al unit.( 9, 11, 16, 22, 24 )
Article 200. Procedure for the calculation an d payment of the property tax of
physical persons

200.1. The property tax shall be calculated on a building according to the
inventory value placed by local government authorities to that building as of
January 1 of each year.
For premises owned by natural persons, the property tax shall be calculated by
the municipality of the area at which they are located.
200.2. Property tax on a building that has several owners shall be calculated, in
accordance with the share of each owner in that building, on the ba sis of
procedure established in Article 200.1. of this Code.
200.3. Tax authorities shall calculate tax on water and air transport facilities, as of
January 1 of each year, on the basis of the relevant information submitted by
authorities registering such facilities. In the absence of such registration the owner
of this property each year before January 1 shall provide to relevant authorities
documents that include all necessary data (year of manufacturing, price at the
moment of purchasing and technical ch aracteristics) on all water and air transport
owned.
Tax on a water or air transport facility that has several owners shall be collected
from the person who has registered such facility under his own name.
200.4. Municipalities shall submit tax payment not ifications to taxpayers not later
than August 1.
200.5. The annual tax amounts shall be paid, in equal portions, before September
15 and before November 15. If property tax was not paid by the previous owner
of property it shall be paid by new owner within timeframes stipulated by this
Article.
200.6. The tax on the property of natural persons shall be paid into local
(municipal) budget.
200.7. The property tax on automobile transport means shall be paid on the date
of their registration, re -registration or implementation of annual technical
inspection. In the absence of documents, confirming the tax payment, registration,
re-registration and technical inspection shall not be conducted. ( 3, 6, 11, 16 )
Article 201. Calculation and payment of the property tax of enterprises
201.1. The average annual value of the property of enterprises shall, for taxation
purposes, be determined pursuant to Article 202 of this Code.
201.1.1. If the property of the enterprise is insured for an amount exceeding its
depreciated cost, property tax is calculated using property tax rates established
under Article 14.3.4 of this Code. If the value of the insured property is set taking

into account the market price, then the provisions of Article 202 of this Code are
applied.
201.2. The tax period on property tax shall be established as calendar year.
201.3. Property taxpayers shall pay 20 percent of annual tax amount not later than
15 of the se cond month of each quarter.
Legal persons, who were not the payers of property tax in previous accounting
year, who are the payers of such tax in the following year, as well as newly
established and payers of property tax, no later than by 15 of the second month of
each end of quarter, in which the property was purchased, shall make the current
tax payments at the rate of 20 percent of the annual amount of property tax, which
shall be subject to calculated for such property.
Current tax payments on property tax are applicable to tax amount, withheld from
the taxpayer for the tax year.
201.4. The amount of tax that shall be paid to the state budget for accounting
period shall be determined with increasing value from the start of year with
consideration of pre vious payments.
In the event of failure to pay current taxes within timeframe established under
Article 201.3 of this Code, for each day of delay of the tax payment the interest
shall be charged to taxpayer in accordance with procedures specified in Articl e
59 of this Code.
Current tax payment on property tax upon expiry of reporting year shall be
recalculated and if the amount of current tax is higher than the tax amount in the
report, the exceeded amount of current tax and relevant amount of interest shal l
be reduced.
201.5. Enterprise shall submit to the tax authority the annual declaration on
property tax no later than March 31 of the year following the reporting year.
A taxpayer -legal person shall, within 30 days from the date of adoption of
decision on its liquidation, and in case when such date is not mentioned for a
permanent representative office of a non- resident, from the date of legalization of
such decision at representatives of the Azerbaijan Republic in foreign countries
(at consular offices of other countries representing interests of the Azerbaijan
Republic), submit property tax declaration to tax authority, and in this case
accounting period shall cover the period from the beginning of the tax year till the
date when the business activity of the taxpayer was terminated

201.6. Taxes on annual return shall be paid before the submission deadline for
such returns. The amount of calculated tax shall be deducted from income, which
shall not be limited by Article 199 of this Code.
201.7. The property tax of enterprises shall be paid into the state budget.
201.8. The property tax payment by enterprises for automobile transport means
shall be made to the state budget at the date established for their registration, re –
registration or technical inspection. If tax is not paid in timely manner the interest
shall be charged pursuant to the provisions of this Code.
In the absence of documents, confirming the tax payment, registration, re-
registration and technical inspection shall not be conducted. ( 6, 11, 14, 16, 24
)
Article 202. Procedure for determining the average annual value of the property of
an enterprise
202.0. For taxation purposes, the average annual value of an enterprise’s
property (with exception of automobile transport means) shall be calculated in the
following way:
202.0.1. The residual value of enterprise property (with exception of
transport me ans) for the start (cost remained after deduction from the
residual value, fixed by the end of the previous tax year, of depreciation
cost calculated for this year) and end of reporting year shall be summed
and divided by two.
202.0.2. If enterprise was es tablished or became a taxpayer of assessed tax
within a accounting year, the residual value of its property (with exception
of automobile transport means) for the balance of the date of
establishment or becoming liable to payment of assessed tax and the en d
of reporting period shall be summed, divided by 24 and multiplied by the
number of month following the month when enterprise was established or
became a taxpayer of assessed tax until the end of the year.
202.0.3. If enterprise is liquidated during the accounting year or is a
simplified taxpayer, the residual value of its assets (excluding vehicles) by
the beginning of the year and the date of liquidation or registration as a
simplified taxpayer shall be summed, divided by 24 and multiplied by the
number of months from the beginning of the year before the month of
liquidation of the enterprise or registration as a simplified taxpayer.( 6, 14
,
21, 24 )
Chapter XIV. Tax on land
Article 203. Tax on land

203.1. The land tax shall be calculated in the form of fixed payment for land area
independent from the results of economic activity of land owners and users.
203.2. Resident and non- resident physical persons, as well as Azerbaijani and
foreign enterprises, shall be registered after obtaining documents proving their
right to own or use land plots. Natural persons and municipal enterprises shall be
registered at municipalities, other enterprises – in the tax authority.
Ar ticle 204. Taxpayers
The payers of tax on land are the physical persons and enterprises who own or
use land plots on the territory of Azerbaijan Republic. (3)

Article 2 05. Taxable base
Land plots granted to the ownership or use of enterprises and physical persons
pursuant to the legislation of the Republic of Azerbaijan shall be objects of
taxation.
Article 206. Tax rates
206.1. Land tax rates for agricultural land shall be 0.06 manat for 1 conventional
point.
206.2. Conventional points shall be determined by the relevant executive
authority with consideration of evaluation procedures depending on the purpose,
geographical location and the quality of agricultural lands in administrative
regions.
206.3. For industrial, construction, transport , telecommunications, trade and
utility services lands and other dedicated lands occupied by agricultural sites of
housing funds and lands of citizens the tax shall be charged for ea ch 100 sq.
meters of the land plot in accordance with rates specified in the table below:
Areas
Industrial, construction,
transport,
telecommunications, trade and housing servicing and other dedicated lands (in
manats)
Lands of housing funds,
agricultural lands and lands
occupied by citizens (in manats)
Baku 10 0.6
Cities Gandja, Sumgayit and
Apsheron district 8 0.5
Other towns (with exception of
regional subordination towns), 4 0.3

regional centers
In towns, settlements and
villages of regional
subordination (with exception
of settlements and villages of
Baku and Sumgayit cities, as
well as Apsheron region) 2 0.1
( 3, 9, 14, 16 )
Article 207. Tax privileges
207.1. The following shall be exempt form the payment of tax on land:
207.1.1. commonly used land belonging to populated areas;
207.1.2. lands owned or used by government authorities and local
management authorities, budget funded organizations, Central Bank of the
Azerbaijan Republic and its structures and also the State Oil Fund of the
Azerbaijan Republic;
207.1.3. land pertaining to the State, forest and water reserves which is not
attracted to economic activity, as well as land located under the
Azerbaij ani sector of the Caspian Sea;
207.1.4. state border lines and lands designated for defense purposes.
207.2. The amount of tax for lands owned by persons stipulated in article 102.2.
of this Code, shall be reduced by 10 manats.( 9, 16, 24
)
Article 20 8. Procedure for the calculation and payment of tax on land
208.1. The land tax shall be established on the basis of documents that confirm
the right of ownership and use of lands. For lands with located structures and
facilities as well as plots necessar y for sanitary protection of facilities the land tax
shall be paid.
208.2. Enterprises shall annually calculate tax on land on the basis of the sizes of
the land spot and the tax rates, and submit such tax returns to tax authorities not
later than May 15 of each year. The amount of land tax paid in such manner shall
be included in deductions from income that shall not be limited by article 119 of
this Code.
208.3. Relevant agencies shall calculate tax on land on physical persons annually
before July 1 of and submit the payment notifications not later than August 1.

208.4. for land plots intended for placement of structures owned by the number of
legal or natural persons, the tax shall be calculated separately, proportional to
areas of structure owned by such parties.
208.5. Tax shall be paid, in equal portions, before August 15 and November 15. If
the land tax was not paid by previous owner of the land, it shall be paid by the
new owner of land plot by the date established in this Article.
208.6. Enterprises shall pay the tax on land to the state budget and natural persons
to the local (municipal) budget.
208.7. Amount of land tax calculated for land used by natural persons for the
purposes of entrepreneur activities as well as land owned by legal entities, shall
be considered as deductions from profits, not limited by Article 119 of this
Code.(21)
Chapter XV. Taxes to the Road Fund
Article 209. Taxpayers
The road fund taxpayers for the use of automobile roads in the Azerbaijan
Republic shall be non- resident enterprises that own the transport means arriving
to the territory of the Azerbaijan Republic and using the territory for
transportation of passengers and cargoes, as well as persons, owning or using on
the territory of the Azerbaijan Republic light vehicle s, buses and other motor
transport means (hereinafter, for the purposes of this Article —motor transport
means).(11)
Article 210. Taxable base The taxable base shall be automobile means of foreign countries arriving to the
territory of Azerbaijan Republ ic, as well as property owned or used on the
territory of the Azerbaijan Republic.(11)
Article 211. Road fund tax rates
211.1. Tax for motor transport means of foreign states, entering the territory of
the Azerbaijan Republic, is calculated dependent on t he type of motor transport,
number of seats, loading capacity and total weight of motor transport means
together with cargo, axis load, distance on the territory of the Azerbaijan
Republic, transportation of hazardous materials, as well as the volumes of
e ngines of motor transport means, owned or used by persons on the territory of
the Azerbaijan Republic in accordance with following rates.
211.1.1. From motor transport means of foreign states, entering the
territory of the Azerbaijan Republic.

211.1.1.1 Motor cars – $15 USA
211.1.1.2 For buses dependent on number of seats and period of
presence on the territory of Azerbaijan Republic:
Period of presence on
territory
With number of seats
up to 12
With number of seats
from 13 to 30
With number of seats
from 3 1 and more
For 1 day 15 dollars USA 20 dollars USA 25 dollars USA
Up to 1 week 30 dollars USA 40 dollars USA 50 dollars USA
Up to 1 month 100 dollars USA 140 dollars USA 175 dollars USA
Up to 3 months 300 dollars USA 400 dollars USA 500 dollars USA
Up to 1 year 1050 dollars USA 1400 dollars USA 1750 dollars USA
211.1.1.3 for trucks, trailer transport means dependent on number of axis
and period of presence on the territory of Azerbaijan Republic:
Period of presence on territory Number of axis up to 4 (four) Number of axis of 4 (four) or
more
For 1 day 20 dollars USA 30 dollars USA
Up to 1 week 40 dollars USA 80 dollars USA
Up to 1 month 140 dollars USA 280 dollars USA
Up to 3 months 400 dollars USA 800 dollars USA
Up to 1 year 1400 dollars USA 280 0 dollars USA
211.1.2. persons, owning or using motor transport means on the territory
of the Azerbaijan Republic (with exception of agricultural equipment, used
for production of agricultural products (tractors, harvesters and cotton
harvesters) and budget organizations motor transport), shall pay the
annual road tax in accordance with volume of engine of this motor
transport in accordance with following rates:
Description of item of taxation Road tax rate
Light vehicles
Engine volumes up to 2000 cubi c sm For each cubic sm. of engine volume — 0.01
manat
Engine volumes above 2000 cubic sm. 20 manat + 0.02 manats for each cubic sm. of
engine volume for the portion of engine
exceeding 2000 cubic sm.
Buses and other automobile transports For each cubic sm. of engine volume — 0.02
manats

211.2. Tax, stipulated in Article 211.1.1.3 of this Code on the movement of heavy
and oversized vehicles and transportation of cargo shall be paid at the following
rates per 1 kilometer of the road in the territory of the Republic of Azerbaijan:
211.2.1. Total weight of a transport facility together with the cargo:
 From 37 to 41 tons- $ 0.15 USA
 From 41 to 51 tons – $ 0.30 USA
 From 51 to 61 tons – $ 0.45 USA
 From 61 to 71 tons – $ 0.60 USA
 From 71 to 81 tons -$ 0.75 USA
 m ore than 81 tons – $ 1.8 USA
211.2.2. If the weight of cargo per axle exceeds the limit allowed in
accordance with the behind- the-axle distance, additional tax shall be
imposed in the following manner:
 up to 20% – $ 0.5 USA
 from 21 to 50% – $1.0 USA
 from 50 to 70% – $2.0 USA
211.3. The category of heavy and large -size vehicles
 shall include vehicles whose weight with the cargo is more than 36 tons,
cargo per axle is more than 10 tons,
 multiple axle (2 and more) transport means, which: when the behind- the-
axle distance is 1,61- 2,5 meters cargo per axle is more than 9 tons, when
the behind-the-axle distance is 1,31- 1,6 meters cargo per axle is more
than 8 tons, when the behind- the axle distance is 1-1,3 meters cargo per
axle is more than 7 tons, when the distance behind the axle is 1 meter
cargo per axle is more than 6 meters.
211.3. The tax amount specified in Article 211.1.1.3 of this Code shall be
increased by percentage for the transportation of dangerous cargo:
 for cargo involving little danger – 100%
 for dangerous cargo — 200%
 for cargo involving special danger – 400%
211.5. Depending on the time duration on the territory of the Azerbaijan Republic
the amount of tax calculated in accordance with articles 211.1.2., 211.1.3. and
211.4. of this Code f or automobile transport means specified in articles 211.1.2.
and 211.1.3. of this Code shall be increased for each day at following rates:
 From 2 to 7 days- 20%;
 From 7 to 30 days – 30%;

 More than 30 days- 40%.( 6, 10, 11, 16 )
Article 212. Road tax deduction
212.1. Tax for motor transport means of foreign states, established in accordance
with Article 211.1 of this Code, is deducted by customs authorities in the entrance
of these motor transport means to the customs territory of the Azerbaijan
Republic and within one banking day is transferred to the state budget.
212.2. In the event of non- submission of documents, verifying the payment of
annual road tax in accordance with procedures, specified in the Article 212.4 of
this Code, registration, re -registration and technical check of motor transport by
the relevant executive power authority, which implements the state registration of
motor transport means, is not im plemented.
212.3. Legal persons, who own or use motor transport means on the territory of
the Azerbaijan by the end of calendar year, shall submit to the tax authority the
annual declaration on road tax no later than by March 31 of the year following
the r eporting year and transfer the paid tax until this period to the state budget.
Amount of paid tax shall be applicable to deductions from profits, not limited by
Article 119 of this Code.
212.4. Natural persons, who own or use motor transport means on the t erritory of
the Azerbaijan Republic, shall pay the annual road tax to the state budget during
the technical check of automobiles.
212.5. Information on newly registered transport means or transport means the
registration of which was cancelled, every quart er no later than by 20
th of each
month, following the reporting quarter, submitted to the relevant executive
authority, which implements the state registration of motor transport, to the
relevant executive authority in accordance with the form, determined by the
relevant executive authority. (11, 16)
Article 213. Royalty (Mining Tax)
Royalty shall be paid with a view to rational use of subsurface resources in the
territory of the Republic of Azerbaijan and on the Caspian shelf.
Article 214. Taxpayers
Payers of royalty are the physical entities and enterprises extracting the minerals
from subsurface strata of the earth on the territory of the Azerbaijan Republic
(including Caspian sea sector belonging to the Azerbaijan Republic). (3)
.
Article 215. Taxable Base

Minerals extracted from subsurface strata in the territory of the Republic of
Azerbaijan, including the portion of Caspian Sea belonging to the Republic of
Azerbaijan.
Article 216. Tax rates
216.1. Royalty is established dependent from the type of produced natural
resources, with application to wholesale price, as follows:
Name of natural resources subject to royalty Royalty rates (in percents)
Crude oil 26
Natura l gas 20
Mining natural resources:
All types of metals
3
216.2. Royalty is calculated for each cubic meter dependent on the following
types of produced natural resources at following rates:
Names of natural resources, subject to royalty tax Royalty tax rates (in manats)
Non -metallic natural resources:
Zeolite 0,5
Barite 0,5
Sawn stone 0,5
Rubbles 0,5
Clays for production of light fillers (claydite,
nodulizer)
0,5
Bentonite clays 0,5
Brick and tiling clays 0,5
Volcano ash and pamice 0,5
Quartz sands 0,5
Construction sands 0,5
cement stuff (limestone, marl -clay, volcano ash) 0,5
mask stones (marble, gabbro, tufs, travertine, marbled
limestone)
1
Precious and half precious jewelry stones 4
Rock salt 4
iodine bromine mixed waters 0,02
Minera l waters 6

(6, 9, 11, 14, 16 )
Article 217. Procedure for calculating tax, term for its payment and submission of
the tax return
217.1. Tax on trade shall be calculated on minerals stipulated in Article 216.1
hereof- with application of the appropriate tax rates to the wholesale price of
minerals mined from the subsurface of the earth, and on minerals stipulated in
Article 216.2 hereof – with application of the appropriate tax rates to each cubic
meter of minerals mined from the subsurface of the earth
217.2. Royalties shall be paid after the extraction of a product on a monthly basis
on no later than 20
th day of the month following the accounting month.
217.3. Payers of royalties shall submit tax returns on a monthly basis no later than
the 20
th day of the month following the accounting month, on the mining tax to
the tax author ities, on taxes to be paid to local budgets – to municipalities.
217.4. The amount of tax calculated in accordance with procedures stipulated by
this Article shall be considered as deductions not limited by Article 119 of this
Code.
217.5. The mining tax (w ith exception of mining tax on construction materials of
local importance) shall be paid to the state budget. The mining tax on construction
materials of the local importance shall be paid to the local (municipal) budget.
Ceramide clays, mortar sand, raw materials from high-strength crushed stone are
considered as the construction materials of local importance.
217.6. When calculating the mining tax in accordance with article 217.1. of this
Code for the production of oil and gas, the volumes of oil and gas re -injected back
to well due to the technological processes shall be deducted from the volumes of
oil and gas produced in accordance with regulations established by relevant
authorities of executive power.( 3, 11, 14
)
Chapter XVII. Simplified tax
Article 218. Payers of Simplified Tax
218.1. With consideration of provision of chapter XI of this Code legal entities
and natural persons not registered for the VAT purposes, engaged in
entrepreneur activities without registration of legal entity, which hav e the volume
of taxable operations for the previous three months period at less than 22 500
manats and less, as well as involved in activities specified in Article 218.2. of this
Code independent from turnover shall be entitled to be taxpayers under simpli fied
regime.

Subject to the provisions of Chapter XI of this Code, legal entities not registered
for VAT purposes, whose volume of taxable transactions during consecutive 12-
month period is 150000 manats and less, and natural persons engaged in
business activity without establishing a legal entity, the volume of which is 90000
manat and less, may be simplified taxpayer.
Taxpayers entitled to payment of simplified tax (with exception of taxpayers,
stipulated under Article 218.1.1 of this Code) annually, no l ater than on April 20
shall submit the appropriate declaration or written notification on non- using of
this right to tax authority, in which they are registered. Taxpayer is not entitled to
make changes to the selected method until the end of calendar year , unless
otherwise is stipulated under this Code. If the taxpayer did not submit the
declaration or written notification within the specified time, the tax authority
applies the taxpayer’s method, used in previous tax year. Taxpayer, who has
started new activities within a year, shall apply the method, specified in the
application for tax registration.
218.1.1. Following persons are the payers of simplified tax:
218.1.1.1. persons, implementing the transportation of passengers and
cargoes in the Azerbaij an Republic by motor transports, owned or used by
them (with exception of international cargo and passenger
transportation),or performing such transportation via other persons on
contractual basis;
218.1.1.2. persons engaged in activities on dwelling housi ng construction
(legal entity or natural person constructing on the own or leased areas, as
well as land plots allocated for dedicated purpose, using his own or
attracted funds for satisfaction of personal needs of population or for
commercial purposes, us ing his own sources or qualified professional
contractor, who owns the facility or complete structure).
218.2. Persons involved in passenger (including taxi) and cargo transportation
shall be taxpayers of simplified tax regime.
218.2. Following groups are not entitled to use simplified tax system:
 Parties producing excise goods,
 Crediting and insurance entities, investment funds, professional security
market participants,
 Non-governmental pension funds;
 Obtaining incomes from letting the property or roya lty,
 the residual value of owned fixed assets at the year start for the amount
exceeding 1 000 000 manats (with exception of persons, specified in
Article 218.1.1 of this Code). ( 6, 9, 11, 16, 21, 24
)

Article 219. Subject of taxation
219.1. The gross volume of cash flow obtained for goods (works, services) and
property provided by the taxpayer(with exception of taxpayers, stipulated under
Article 218.1.1 of this Code) (with exception of taxpayers, engaged in activities
stipulated under Article 218.2 of this Code ), as well as non-sale incomes within
reporting period shall be subject to taxation.
219.1-1. Motor transports, owned or used by taxpayers, specified in
Article 218.1.1.1 of this Code, are subject to taxation.
219.1.2. For persons, pe rforming activities in residential housing
construction, the toal area of the building, including basements, floors and
garrets (with exception of the portion allocated to state, living area,
constructed of which is funded by state budget, non- budgetary funds,
under state guarantees and aid provided to state, individual residential
houses, or site of constructions not in contact with other facilities) shall be
subject to taxation.
219.2. The taxable turn- over of taxpayers involved in activities stipulated u nder
Article 218.2 of this Code shall be established by the relevant executive authority
on regional basis in accordance with conventional turn- over established for
various types of transport means dependent from load capacity and number of
seats.
219.2. L egal entities paying simplified tax (with exception of persons specified in
Article 218.1.1.2 of this Code) shall not pay VAT, profit tax and property tax, and
natural persons involved in entrepreneur activity without creation of legal entity –
profit tax and VAT on subject activity.
219.2.1. Legal entities paying simplified taxes in accordance with Article
218.1.1.2 of this Code shall not be subject to profit tax and property tax, and
natural persons performing entrepreneur activities without formation of legal
entity shall not be the payers of income tax for such operations. (6, 9
, 11, 16)
Article 220. Simplified tax rate
220.1. The simplified taxВ«(with exception of taxpayers engaged in activities,
stipulated under Article 218.1.1 of this Code) ( with exception of taxpayers
engaged in activities stipulated under Article 218.2 of this C ode) shall be
calculated from the amount of funds (gross volume of cash flow) obtained from
provision of goods, implementation of words, rendering of services by the
taxpayers and non- sale profits at following rates:
 for Baku: 4 percent
 for other regions and cities, Nakhichevan Autonomy Republic: 2 percent

220.2. Taxpayers involved in activities stipulated under Article 218.2 of this Code
shall pay the tax at the rate of 10 percent.
220.2. For taxpayers involved in activities in cities and regions of the Azerbaijan
Republic, with exception of Baku, including Nakhichevan Autonomy Republic, the
tax rate established shall be applied only when taxpayers are engaged in
activities on these territories using their own production facilities, property and
labour.
220.3 Payers of simplified tax registered for taxation purposes in cities and
regions of the Azerbaijan Republic, in Nakhichevan Autonomy Republic, but
engaged in activities in the city of Baku shall be subject for payment of simplified
tax established for the city of Baku.
220.4. On profits established for various tax rates, control shall be conducted
separately. The highest tax rate shall be applied in the event of failure to maintain
such control.
220.5. Simplified tax for taxpayers engaged in passenger and cargo
transportation by automobile transport, is determined as follows:
Type of transportation
Unit of measurement
applied by simplified tax
Monthly amount of simplified tax
(in manats)
Passenger transportation (with
exception of taxis), by the
number of seats:
1 seat 1.8
Passenger transportation by
taxi
1 unit of transport 9.0
Cargo transportation Load capacity (each 1 ton) 1.0
220.6. Simplified tax for taxpayers, implementing passenger and cargo
transportation, dependent on the type and territory of operations, is determined
with application to the amount of simplified tax, specified in Article 220.5 of this
Code, of following rates:
220.6.1. in the city of Baku (including villages and districts) and between
Baku and other settlements of the count ry — 2.0;
220.6.2. Absheron region, in the cities of Sumgayit, Gandja and between
this region and cities and other settlements of the country (with exception
of those specified in Article 220.6.1 of this Code) — 1.5;
220.6.3. In other cities and distri cts and between these cities and districts
and other settlements (with exception of those specified in Articles 220.6.1
and 220.6.2 of this Code) — 1.0.

220.7. Number of seats in the automobile transports (with exception of
taxis) or loading capacity, are determined by the registration certificate of
the automobile transport.
If number of seats or load capacity of vehicles (with the exception of taxis)
have not been mentioned on the registration certificates of the vehicles,
such data shall be determined based on the certificates given to tax
authorities by the appropriate executive authority. In the event that it was
impossible to determine the number of seats on the basis of the
registration certificate of the vehicle or according to the certificates giv en
by the appropriate executive authority, then amount of the simplified tax
shall be determined based on the actual number of seats.
220.8. For persons engaged in operations on residential housing
construction, the simplified tax is calculated with applic ation of rates
established by relevant executive authority on the basis of zoning of
country’s cities and regions, to the amount of 10 manats for each
square meter of taxable object, defined in Article 219.1.2. of this Code. ( 6
,
9, 11, 14, 16, 21, 24 )
Article 221. Procedure for calculation of simplified tax, period of payment and
submission of declaration.
221.1. The amount of simplified tax (with exception of taxpay ers, stipulated under
Article 218.1.1 of this Code) for the reporting period shall be calculated via
application of tax rate stipulated under Article 220 of this Code to the gross
volume of cash flow for reporting period.
221.2 Quarter shall be the reporti ng period for simplified tax regime.
221.3. Payers of simplified tax shall, no later than the 20
th day of each month
following the reporting period, submit to tax authorities the declaration on the
amount of tax that shall be paid and make the tax payment to the state budget
within same period.
In case of liquidation of a legal person- taxpayer or if activity of a physical person
engaged in business undertakings without having established a legal person is
terminated, a declaration should be submitted to the tax authority within 30 days.
In this case, tax period shall cover the period from the beginning a term
considered as accounting period till the date when the taxpayer stopped his
activity.
221.4. Simplified tax for passenger and cargo transportation by t he automobile
transport is calculated as follows:

221.4.1. Simplified tax for each automobile transportation of the taxpayer,
engaged in passenger and cargo transportation, is calculated by
multiplication of the applied unit of measurement of simplified tax,
specified in Article 220.5 of this Code, to the monthly amount of simplified
tax, specified in this Article, as well as on rates, specified in Article 220.6
of this Code, and transferred to state budget.
221.4.2. Taxpayers, specified in Article 218.1.1.1 of this Code, shall pay
the simplified tax, calculated for the territory of actual implementation of
passenger and cargo transportation in accordance with Articles 220.5 –
220.7 of this Code, independent of the place of registration of the
automobile transport.
221.4.3. During implementation of passenger and cargo transportation by
the automobile transport, used under the power of attorney or leasing
agreement, the responsibility for the payment of simplified tax lays with
persons, who perform the operati ons of automobile transport under the
power of attorney or leasing agreement. In all other cases, the
responsibility for payment of simplified tax lays on the owner of transport.
221.4.4. During implementation of passenger and cargo transportation by
autom obile transport, owned by legal entities, by the legal entity itself, the
simplified tax shall be paid by this legal entity.
221.4.5. Taxpayers, engaged in passenger and cargo transportation by
automobile transport, do not submit to tax authorities the dec laration on
their operations, unless otherwise is stipulated under this Code.
221.4.6. Control over accurate calculation and timely payment to the state
budget of the simplified tax by taxpayers, engaged in passenger and cargo
transportation, shall be impl emented by the relevant executive authority.
221.4.7. Persons, implementing passenger and cargo transportation by
automobile transport, shall by the end of calendar month obtain in the
relevant executive authority for following month, quarter, half -year or
year as per own wish for each transport the В«Distinction SignВ» issued
no later than within two business days upon the taxpayer`s application in
the form approved by the appropriate executive authority carrying out
transportation policy.
To the applicati on of taxpayer for obtaining of the В«Distinction SignВ»
shall be attached the bank payment document, verifying the payment of
simplified tax for this activity. In the bank payment document shall be
specified the series and number of state registration lic ense of automobile
transport.

Legal persons and physical persons engaged in business undertakings without
havingestablished a legal person dealing with transportation of passengers and
cargo shall be given В«a Distinction SignВ» after they have fully paid the
calculated tax amount to the State Budget. Taxes paid by persons dealing with
transportation of passengers and cargo using vehicles shall neither be returned to
them nor replaced with taxes for the next month, regardless of whether they were
actually carried out such activities or not in that month.
In case of change of the owner or user of the vehicle, taxes paid for the
next months by the previous owner or user for that vehicle shall be taken
into consideration and official re -registration of the В«Distinction signВ»
confirming payment of taxes shall not be required.
221.4.8. Forms of the В«Distinction signВ» and В«Special distinction
signВ» shall be determined by the appropriate central executive authority
carrying out the transportation policy, and shall contain the following
information:
221.4.8.1. Full name of the taxpayer -legal person, or name, middle
name and family name of the physical person;
221.4.8.2. Tax ID number ;
221.4.8.3. effectiveness period of the sign;
221.4.8.4. model of the ve hicle and state registration sign;
221.4.8.5. number of seats or load capacity of the vehicle;
221.4.8.6. territory where the transportation is carried out;
221.4.8.7. amount of taxes paid.
221.4.9. Automobile transport used for transportation of employee s and
their luggage for provision of own operations by automobile transport,
owned by the taxpayers, shall not be subject to simplified tax and for this
transports the В«Special Distinction SignВ» is obtained.
В«Special Distinction SignВ» is issued by the relevant executive authority
within five business days upon application of the taxpayer, having the
automobile transport in possession. No payment is required for obtaining
of В«Special Distinction signВ».
Taxpayers, who received the В«Special Distinction SignВ», during sales
or transfer of automobile transport under leasing, as well as in the event
of changes to its applications, not stipulated under this Article, no later

than in one business day in advance shall return the В«Special Distinction
SignВ» to the issuing authority.
221.4.10. Upon the registration of new transport means used for
transportation of taxpayer’s employees and their luggage, owners of
these automobile transport within five days shall submit the information to
relevant executive au thority in accordance with form, approved by the
relevant executive authority.
221.4.11. Consideration of taxpayer incomes and expenditures, engaged,
in addition to transportation of passengers and cargoes by automobile
transport, other types of activities , shall be implemented separately for
each types of activity.
221.4.12. Losses of the taxpayer, engaged in passenger and cargo
transportation by automobile transport, shall not be assigned to profits
from other entrepreneur activities.
221.4.13. В«Distinction signВ» or В«Special distinction signВ» shall not
be received for special purpose vehicles equipped with a special sign or
equipments (with the exception of such services rendered to them by other
taxpayers within business activity), as well as vehicles intended for the
official use of public authorities, budget organizations and local self –
government bodies, Central Bank of the Azerbaijan Republic, foreign
contractors and sub- contractors acting within production sharing, main
export pipeline and other similar types of agreements, state funds,
diplomatic and consular representatives of foreign countries,
representatives of international organizations, and owners of such
vehicles shall inform the appropriate executive authorities about such
vehicles.
The appropriate executive authority shall inform the appropriate executive
authority till the 10
th day of the next month about the signs given during
the previous month.
221.5. Persons engaged in residential housing construction, shall calculate the
simplified tax for each construction site in the quarter when the construction has
commenced, as per article 220.8 of this Code, and no later than 20
th of following
month of the quarter shall submit the declaration to the tax authority in the form
specified by relevant executive authority.
Taxpayers specified in Article 218.1.1.2 of this Code independent of their
place of registration as taxpayers, shall pay the simplified tax for the
territory where actual operations are taking place on construction of
residential housing (place of location of construction site), defined as per
Article 220.8 of this Code.

Upon submission to tax authority of the declaration specified under this
Article, calculated tax is paid to state budget in equal portions at the rate
of 12.5 percent no later than by 20
th of the month following the quarter,
until fulfillment of all obligations.
221.6. Persons, specified in Article 218.1.1 of this Code shall maintain the
calculation of all profits and expenditures separately for each type of activity.
Profits (losses) of the se persons on these types of operations shall not be
applicable to profits (losses) from other operations. ( 6, 11, 14, 16, 21, 24
)
Published in В«AzerbaijanВ» newspaper (1 September, 2000, в„– 199)(
В«VneshExpertServiceВ» LLC).
Published in В«Compiled Laws of Azerbaijan RepublicВ» (31 August, 2000,
в„ – 8, book 1, article 583) (В«VneshExpertServiceВ» LLC).

The list of documents that affect changes and updates to
this Code
1. Law of the Azerbaijan Republic / No 157- IIGD; 22 June, 2001
2. Law of the Azerbaijan Republic / No 171- IIGD; 2 July, 2001
3. Law of the Azerbaijan Republic / No 217- IIGD; 16 November, 2001
4. In compliance with the Decree of the Constitutional Court of the Azerbaijan
Republic as of 8 April, 2002
“The period of limitation for calling to account for offence, connected with tax
legislation, envisag
ed by the Tax Code of the Azerbaijan Republic shall be applied in an order
stipulated by the Article 56 of the Tax Code and period of limitation to institute
criminal proceedings for corpus delicti stipulated by the Article 213 of the
Criminal Code of the Azerbaijan Republic respectively – in an order stipulated by
the Artic le 75 of the Criminal Code of the Azerbaijan Republic” – “Azerbaijan”
newspaper, 10 A pril, 2002, в„– 80.
5. In compliance with the Decree of the Constitutional Court of the Azerbaijan
Republic as of 6 August, 2002
В«When applying provisions of Articles 49.3 and 49.6 of Tax Code of the
Azerbaijan Republic in connection with violation of tax legislation, calling to
account for similar act (action or inaction), stipulated by Tax Code or Code for
Administrative Violations shall be performed only once. Provisions of the Article

49.6 of Tax Code shall be applied in cases when Tax Code stipulates
responsibility for tax violations” – "Azerbaijan" newspaper, 9 August, 2002, в„ –
180.
6. Law of the Azerbaijan Republic / в„ – 383-IIGD, dated 26 November, 2002 –
В«AzerbaijanВ» newspaper, 28 December, 2002, в„ – 299.
7. Law of the Azerbaijan Republic / в„ – 485-IIGD, dated 30 June, 2003 –
В«AzerbaijanВ» newspaper, 6 August, 2003, в„ – 178.
8. Law of the Azerbaijan Republic / в„ – 506-IIGD, dated 4 November, 2003 –
В«AzerbaijanВ» newspaper, 2 December, 2003, в„ – 276.
9. Law of the Azerbaijan Republic / в„ – 519-IIGD, dated 28 November, 2003 –
В«AzerbaijanВ» newspaper, 31 January, 2004, в„ – 24.
10. Law of the Azerbaijan Republic / в„ – 766-IIGD, dated 28 September, 2004 –
В«AzerbaijanВ» newspaper, 10 November, 2004, в„ – 262.
11. Law of the Azerbaijan Republic / в„ – 792-IIGD, dated 3 December, 2004 –
В«AzerbaijanВ» newspaper, 5 January, 2005, в„ – 2.
12. Law of the Azerbaijan Republic / в„ – 815-IIGD, dated 24 December, 2004 –
В«AzerbaijanВ» newspaper, 10 February, 2005, в„ – 31.
13. Law of the Azerbaijan Republic / в„ – 943-IIGD, dated 24 June, 2005 –
В«AzerbaijanВ» newspaper, 11 August, 2005, в„ – 184
14. Law of the Azerbaijan Republic / в„ – 1028-IIGD dated 21 October, 2005 –
В«AzerbaijanВ» newspaper, 17 December, 2005 РіРѕРґР°, в„ – 292.
15. Law of the Azerbaijan Republic / в„– 167- IIIGD dated 20 October, 2006 –
В«AzerbaijanВ» newspaper, 30 December, 2006, в„ – 294.
16. Law of the Azerbaijan Republic / в„ – 196-IIIGD dated 15 December, 2006 –
В«AzerbaijanВ» newspaper, 30 December, 2006, в„ – 294.
17. Law of the Azerbaijan Republic / в„ – 220-IIIGD dated 29 December, 2006 –
В«AzerbaijanВ» newspaper, 15 January, 2007, в„ – 15.
18. Law of the Azerbaijan Republic / в„ – 392-IIIGD dated 16 June, 2007 –
В«AzerbaijanВ» newspaper, 30 June, 2007, в„ – 141.
19. Law of the Azerbaijan Republic / в„ – 315-IIIGD dated 17 April, 2007 –
В«AzerbaijanВ» newspaper, 19 August, 2007, в„ – 184.

20. Law of the Azerbaijan Republic / в„– 430-IIIGD dated 9 October, 2007 –
В«RespublikaВ» newspaper, 27 November, 2007, в„ – 267 (This Law comes into
force at the same day with the Administrative -Procedural Code of the Azerbaijan
Republic).
21. Law of the Azerbaijan Republic / в„ – 472-IIIGD dated 6 November, 2007 –
В«AzerbaijanВ» newspaper, 15 December, 2007, в„ – 283.
22. Law of the Azerbaijan Republic / в„ – 648-IIIGD dated 13 June, 2008 –
В«RespublikaВ» newspaper, 10 July, 2008, в„ – 149.
23. Law of the Azerbaijan Republic / в„ – 699-IIIGD dated 2 October, 2008 –
В«AzerbaijanВ» newspaper, 16 November, 2008, в„ – 257.
24. Law of the Azerbaija n Republic / в„– 835-IIIGD dated 19 June, 2009 –
В«AzerbaijanВ» newspaper, 16 November, 2009, в„ – 149.
25. Law of the Azerbaijan Republic / в„ – 42-IVGD dated 30 December, 2010 –
В«AzerbaijanВ» newspaper, 23 January, 2011, в„ – 16.
26. Law of the Azerbaijan Republic / в„ – 117-IVGD dated 17 May, 2011 –
В«AzerbaijanВ» newspaper, 7 July, 2011, в„ – 145.
27. Law of the Azerbaijan Republic / в„ – 161-IVGD dated 10 June, 2011 –
В«AzerbaijanВ» newspaper, 7 July, 2011, в„ – 145.
28.Law of the Azerbaijan Republic / в„ – 263-IVGD dated 06 December, 2011 –
В«AzerbaijanВ» newspaper, 22 December, 2011, в„ – 283.
29. Law of the Azerbaijan Republic / в„ – 334-IVGD dated 20 April, 2012 –
В«AzerbaijanВ» newspaper, 6 June, 2012, в„ – 123.
30. Law of the Azerbaijan Republic / в„ – 351-IVGD dated 1 May, 2012 –
В«AzerbaijanВ» newspaper, 8 June, 2012, в„ – 125.
31. Law of the Azerbaijan Republic / в„ – 383-IVGD dated 12 June, 2012 –
В«AzerbaijanВ» newspaper, 12 July, 2012, в„ – 152.

* These changes, introduced by the Law of the Azerbaijan Re public IIIGD of 6
November, 2007come into force at the same day with respective Law, making
changes connected with organization of activity of the subjects of business activity
according to the principle of В«one windowВ», to the Law of the Azerbaijan
Repu blic В«On state registration and State Register of Legal EntitiesВ» and other
laws – Law of the Azerbaijan Republic/ в„ – 543-IIIGD dated 7 February, 2008 .

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