Effective from January 1, 2013

The Law "On Amendments to the Tax Code of the Republic of Azerbaijan" approved on December 21, 2012 and effective from January 1, 2013 provides for changes in 131 Articles of the Tax Code, and covers such directions as protection of taxpayers' rights and interests and improvement of tax administration and control.

As to protection of taxpayers' rights, last amendments to the Tax Code provide for possibility for the taxpayer of concluding a tax partnership agreement with tax authorities for minimization of financial losses, avoiding additional control measures and risks connected with tax payments as well as improving transparency.

Amendments also contain some tax rate reductions. The maximum rate of income tax from employment income and non-entrepreneurial activities has been reduced from 30% to 25 %, while the amounts of monthly employment income and annual income from non-entrepreneurial activities taxable at 14 % has been increased from 2000 AZN to 2500 AZN and from 24000 AZN to 30000 AZN respectively.

One of the most important changes was to improve the access of the tax authorities to the bank information, especially for the purpose of exchange of such information with other countries under international treaties concluded by the Republic of Azerbaijan. According to these amendments, the tax authorities of Azerbaijan may get information on the bank account and operations of any person covered by relevant international tax agreement if there's a request to this regard from the other Party to that agreement and transfer that information to the requesting state.

The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.

Published on our website on January 31, 2013