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In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

Accounting Rules

Tax Year
The financial year begins on the 1st of January and ends on 31st December of the same year.
Accounting Standards
The Azerbaijani accounting norms respect the norms by the International Accounting Standards Board.
For more information, visit the website of the Ministry of Finance of the Republic of Azerbaijan  (in English and Russian).
To consult the laws on the accounting norms in the Republic of Azerbaijan, click here.
Accounting Regulation Bodies
Ministry of Finance of the Republic of Azerbaijan
Accounting Reports
Certain companies have to use the IFRS norms : financial institutions, big companies, Investment Funds and credit institutions. Other companies have the choice between IFRS and national (NAS) norms. Small companies (whose annual sales turnover is less than 2.5 billion AZM or whose assets value is less than 5 billion AZM) will have the choice between NAS and a simplified method of accounting.

The accounting structure includes the balance sheet, the profit and loss account and the notes to the accounts.

Publication Requirements
With the exception of companies operating under a Production Sharing Agreement (PSA), annual accounts should be in Azeri and in the local currency (manat). The Production Sharing Agreement (PSA) exempts certain foreign companies from the form of their accounts. In practice, the majority amongst them use the IFRS norms.
Professional Accountancy Bodies
The Chamber of Auditors of Azerbaijan Republic
Association of Accountants of the Republic of Azerbaijan
Certification and Auditing
Audit is obligatory for companies having foreign capital, for Private Limited companies and companies whose annual turnover is more than 2.5 billion AZM or whose assets value is more than 5 billion AZM.The auditor should be certified by the Chamber of Auditors of Azerbaijan.
The Auditing Services Law 1995 governs the audit rules in Azerbaijan. These are based on the international norms (ISAs).
You can contact an external auditor: Deloitte, Ernst & Young, PricewaterhouseCoopers.
Accounting News
Azerbaijan: general information website on the Republic of  Azerbaijan.
IAS Plus

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Tax Rates

Consumption Taxes

Nature of the Tax
Əlavə Dəyər Vergisi (ƏDV) - VAT (Value Added Tax).
Tax Rate
18%
Reduced Tax Rate
Exports as well as financial and insurance services are exempted from VAT.
Other Consumption Taxes
Excise duties on alcohol, tobacco products, oil products, light vehicles, leisure and sport yachts and certain floating transports.

Learn more about Service Providers in Azerbaijan on Globaltrade.net, the Directory for International Trade Service Providers.

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Corporate Taxes

Company Tax
20%
Tax Rate For Foreign Companies
A person is considered as a resident if he has stayed for an accumulated period of more than 182 days in a calendar year on the territory of Azerbaijan. Non-residents are taxed on their consumption in the same way as residents.
Capital Gains Taxation
Capital gains are included in taxable income and taxed at the regular rate.
Main Allowable Deductions and Tax Credits
Possible deductions for expenses connected with the obtaining of income, interests on loans, repair expenses, business trip expenses, depreciation, tax paid overseas.
Other Corporate Taxes
Real property tax, social security contributions, assets tax.
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Country Comparison For Corporate Taxation

  Azerbaijan Eastern Europe & Central Asia United States Germany
Number of Payments of Taxes per Year 18.0 28.0 11.0 9.0
Time Taken For Administrative Formalities (Hours) 214.0 260.0 175.0 207.0
Total Share of Taxes (% of Profit) 40.0 40.5 46.7 46.8

Source: Doing Business - Last Available Data.

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Individual Taxes

Tax Rate

From AZN 0 to 24,000 14%
More than AZN 24,000 25%
Allowable Deductions and Tax Credits
Some expenses are not included in the taxable income, such as: the reimbursement of business expenses; dividends and interest received by physical persons and previously taxed at the source of payment in the Azerbaijan Republic; and entertainment and meals, employee’s accommodation and other expenses of social nature incurred by the employer for employee.
Special Expatriate Tax Regime
Expatriates are taxed on their Azerbaijani income at the same rate as the nationals.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
List of the fiscal conventions signed by the Republic of Azerbaijan
Withholding Taxes
Dividends: 10%, Interest: 10%, Royalties: 14%

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Sources of Fiscal Information

Tax Authorities
Ministry of Taxes of the Republic of Azerbaijan
Other Domestic Resources
Azerbaijan: website with information on the Republic of Azerbaijan (section on the economy and taxes)

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Learn more about Taxes and Accounting in Azerbaijan on Globaltrade.net, the Directory for International Trade Service Providers.

Intellectual Property

National Organizations
After the declaration of independence of Azerbaijan from the USSR in 1991, the country created in 1993 the department of patents and trademarks under the aegis of the Committee of Technology and Sciences (Patent and License Department of the State Committee of Science and Technology). The country also founded the Copyright Agency of the Republic of Azerbaijan and the State Committee on Standardization, Metrology and Patents.
Regional Organizations
Azerbaijan is a member of the Eurasian Patent Organization.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Patent Law 1997 (Law on patents)
Valid for 20 years Patent Cooperation Treaty (PCT)
Trademark
 
Trademarks Law (law on registered trademarks) law in the process of being drawn up ; Paris Convention in force
10 years renewable Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Design
 
Patent Law 1997 (Law on Patents)
Initial validity period of 10 years  
Copyright
 
Law on the rights of authors
Upto 50 years after the death of the author Berne convention For the Protection of Literary and Artistic Works
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Industrial Models
 
Patent Law (Law on Patents)
10 year period  

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Legal Framework

Independence of Justice
The judiciary in the country does not work independently and is corrupt and inefficient.
Equal Treatment of Nationals and Foreigners
The judiciary does not guarantee an impartial trial to a foreign national.
The Language of Justice
The judicial language of Azerbaijan is Azerbaijani.
Recourse to an Interpreter
It is possible to call for an interpreter.
Sources of the Law and Legal Similarities
The Constitution of 1995 is the main source of the law, with the country's legal system based on a civil law system.
For more information, visit the website of the Law University of New York (section dedicated to the Azerbaijani law).
Checking National Laws Online
Azerbaijan: website containing general information on the Republic of Azerbaijan, juridic section

Learn more about Lawyers and Legal in Azerbaijan on Globaltrade.net, the Directory for International Trade Service Providers.

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Standards

National Standards Organizations
National Agency for Standardization, (website in English under construction)
Integration in the International Standards Network
The institution responsible for laying down product standards and certification in Azerbaijan is The State Agency on Standardization, Metrology and Patents of Azerbaijan (AZSTAND). AZSTAND is a committee member of the International Organization for Standardization (ISO), member of the Interregional Association for Standardization (IRSA), and member of the Euro-Asian Council for Standardization, Metrology and Certification (EASC).
Classification of Standards
AZS. The National Agency for Standardization has a website on which one can consult the classifications and the procedure for classification (only in Russian, the English website is currently under construction).
Online Consultation of Standards
Consult the standards on the National Agency for Standardization (only in Russian, the English website is currently under construction).
Certification Organizations
Système “UKRSEPRO” (en anglais) Website in English.

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Business Practices

General Information
Kwintessential:, guide and advices for the Republic of Azerbaijan
Opening Hours and Days
Banks: from 9.30 am to 5.30 pm from Monday to Friday.
Companies : from 9 am to 6 pm from Monday to Friday.
Shops : from 9 am to 7 pm from Monday to Saturday.
Weekly off-days : Saturday and Sunday.
 

Public Holidays

New Year's Day 1st January
Extended holiday (the day after New Years) 2nd January
Martyrs Day 20th January
Womens Day March
Navroz (traditional Iranian festival celebrating the new year according to the Iranian calendar) from 20th March to 22nd March included
Orthodox Easter April
Victory Day 9th May
Proclamation of the first Democratic Republic 28th May
National Salvation Day 15th June
National Army and Navy Day June
End of Ramadan 2 days (varies according to the year)
Independence Day 18th October
Eid-ul-Adha or Big Baïram or Aïd or Tabaski or Id-Ul-Zuha (Bakrid) - Mutton Festival 2 days (varies according to the year)
Solidarity Day 31st December
 
 

Periods When Companies Usually Close

Summer vacations from mid-June to end of August
Winter vacations from the end of December to the beginning of January
 

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Last Updates: October 2014