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Retained

  • Statutory Tax Rate 20
  • Surtax Based on Taxable Income 0
  • Surtax Based on Statutory Tax 0
  • Surtax Deductible from Taxable Income 0
  • Statutory Tax Deductable 0
  • Effective Tax Rate 20

Statutory Tax Rate

The standard corporate tax rate is 20% for both resident and non-resident taxpayers. Azerbaijan also has a separate regime for oil and gas companies operating under Production Sharing Agreements (PSAs) and a Main Export Pipeline (MEP) regime. Under the PSA regime, pre-negotiated rates of 25% to 32% are set as part of the agreement, or for foreign subcontractors, withholding tax of 5% to 10% may apply on gross payments received. Under the MEP regime, a fixed rate of 27% applies on the taxable income of each participant in an MEP project.

Further, a simplified regime is available for smaller taxpayers not registered for VAT and with revenue below AZN 200,000 in a 12-month period, except for taxpayers producing excisable goods, credit and insurance organizations, and investment funds and professional participants in the securities market. The simplified tax is levied on gross revenue at a rate of 4% in Baku and at a rate of 2% in other regions of Azerbaijan. The simplified regime may also be applied by taxpayers engaged in trade and catering services if revenue is in excess of AZN 200,000, but at a rate of 6% and 8%, respectively. Lastly, a simplified regime based on rates per square meter is available for taxpayer's engaged in construction.