Unofficial transfer (c) Soyuzpravoinform LLC

LAW OF THE AZERBAIJAN REPUBLIC

of December 9, 2022 No. 677-VIQD

About modification of the Tax code of the Azerbaijan Republic

Being guided by Item 15 of part I of article 94 of the Constitution of the Azerbaijan Republic, Millie DECIDES: Majlis of the Azerbaijan Republic

Article 1

In the Tax code of the Azerbaijan Republic (Collection of the legislation of the Azerbaijan Republic, 2000, No. 8 (book I), Article 583; 2001, No. 7, Article 454, No. 9, Article 576, No. 12, Article 734; 2002, No. 5, Article 249, No. 12, Article 707; 2003, No. 8, article 425, No. 12 (book I), Article 671; 2004, No. 1, Article 1, No. 11, Article 887, No. 12, Article 980; 2005, No. 2, Article 61, No. 8, Article 688, No. 12, Article 1081; 2006, No. 12, Articles 1005, 1026; 2007, No. 1, Article 4, No. 6, Article 597, No. 8, Article 745, No. 11, Article 1053, No. 12, Article 1192; 2008, No. 7, Article 602, No. 11, Article 960; 2009, No. 7, Article 506; 2011, No. 1, Article 14, No. 7, Articles 588, 603, No. 12, Article 1115; 2012, No. 6, Articles 500, 513, No. 7, Article 652, No. 9, Article 841, No. 12, Article 1226; 2013, No. 2, Article 91, No. 4, Article 366, No. 11, Article 1278, No. 12, Articles 1483, 1486, 1495; 2014, No. 2, Articles 94, 98, No. 6, Article 608, No. 7, Article 770, No. 8, Article 957, No. 10, Article 1158, No. 12, Article 1525; 2015, No. 1, Article 11, No. 12, Article 1433; 2016, No. 2 (book I), Article 207, No. 3, Articles 396, 402, No. 5, Article 848, No. 6, Articles 973, 974, 1015, No. 7, Article 1245, No. 10, Article 1603, No. 11, Articles 1752, 1792, 1793, No. 12, Articles 2001, 2037, 2046; 2017, No. 2, Article 146, No. 5, Articles 695, 723, 737, No. 6, Article 1055, No. 7, Article 1304, No. 8, article 1509, No. 12 (book I), Articles 2219, 2251, 2270; 2018, No. 2, Article 149, No. 5, Article 863, No. 6, article 1193, No. 7 (book I), Articles 1414, 1427, No. 10, Article 1962, No. 11, Articles 2186, 2210, No. 12 (book I), Article 2498, 2509; 2019, No. 1, Article 30, No. 4, Article 590, No. 5, Articles 796, 801, 804, 812, 814, No. 8, Articles 1364, 1373, 1378, No. 12, Article 1894; 2020, No. 5, Article 522, No. 6, Articles 668, 678, No. 7, Article 832, No. 8, Article 1013, No. 11, Articles 1328, 1334, No. 12 (book I), Article 1439, 1441, 1454, 1455; 2021, No. 3, article 211, No. 6 (book I), Articles 541, 551, 555, No. 7, Articles 698, 711, No. 8, Article 894, No. 10, Articles 1090, 1092, No. 12, Articles 1305, 1337; 2022, No. 1, of Article 6, of 7, of 17, No. 6, Article 587, No. 7, Article 716, No. 8, Article 832) to make the following changes:

1.1. in Article 2.6 of the word "in the relation" shall be replaced with words "if it is used for the purpose of tax avoidance in the relation, including";

1.2. in Article 2.8 shall be replaced with words the word "assessment" "the certificate of results of assessment which is carried out according to the procedure, established by the body (structure) determined by relevant organ of the executive authority";

1.3. at the end of part 9 of Article 13.2.16.14-1 to replace point with semicolon and to add with part 10 of the following content:

"10. in case of transfer (transfer) of net profit of permanent mission of the nonresident to this nonresident.";

1.4. add with Article 14.3.6 of the following content:

"14.3.6. in case of non-presentation by the taxpayer (absence) of documents on presentation (obtaining) of goods (works, services) in case of tax control measure.";

1.5. under Article 14-1:

1.5.1. the second offer of Article 14-1.1.4 to state in the following edition:

"Method of profit distribution is distribution when carrying out transactions between persons specified in Article 14-1.2 of this Code, the profit got by each of the parties from these transactions based on this Article.";

1.5.2. add with Article 14-1.10 of the following content:

"14-1.10. Determination of profit (income) from the Azerbaijani source and calculation of taxes concerning permanent mission of this nonresident in the Azerbaijan Republic is determined by the income of nonresident persons based on this Article.";

1.6. under Article 14-2:

1.6.1. in Article 14-2.1 of the word", registered in the countries (in the territories) the preferential taxation" to exclude;

1.6.2. in Article 14-2.1.1 after the word "has" to add with the word "and";

1.6.3. in Article 14-2.1.2 of the word "if twice or there is even less tax" shall be replaced with words "if it is equal to 75 percent or smaller part of tax";

1.6.4. in Article 14-2.2 the word "Control" shall be replaced with words "Procedure for inclusion of profit of controlled overseas enterprise in the taxable income of person which is considered as resident of the Azerbaijan Republic and also control";

1.7. under Article 16:

1.7.1. in Article 16.1.8 after words to add "medical institutions" with the words "and the physical persons practising private medicine";

1.7.2. state Article 16.1.11 in the following edition:

"16.1.11. provide in tax authority information in the form approved by the body (structure) determined by relevant organ of the executive authority, before date of account transactions, opened in the credit nonresident organizations or persons making bank nonresident transaction for the purpose of business activity;";

1.7.3. in Article 16.1.11-4 after words of "electronic reports" to add with the words "and the electronic reports specified upon the demand of tax authority";

1.7.4. add with Article 16.1.11-6.5 of the following content:

"16.1.11-6.5. on the payments made by lawyers and lawyer structures in Bar of the Azerbaijan Republic;";

1.7.5. state Article 16.1.11-11 in the following edition:

"16.1.11-11. except for to present the taxpayers performing activities in the oil and gas sphere or carried to public sector and also the taxpayers using gating system "Green channel" until exit of goods from under customs control (within 1 working day from the moment of exit of the goods transported by air transport from under customs control) in tax authority in the place of accounting in the form approved by the body (structure) determined by relevant organ of the executive authority, the following data on the goods imported by other taxpayers:";

1.7.6. add Article 16.1.11-11.3 with the paragraph the second the following content:

"In the presence at the taxpayer of one business entity (object) registered in tax authority, the form of data provided by this Article in tax authority is not represented. In this case imported goods are considered shipped to this business entity (object).";

1.7.7. in Article 16.6 after the word to "representations" to add with the words "and to individual entrepreneurs", and and "(reassured)" to exclude from this Article of the word "and overcautious persons";

1.7.8. in Article 16.7 "Article" shall be replaced with words the word "and Article 228";

1.8. under Article 30:

1.8.1. in Article 30.2.2 after the word "number" to add with the words "and accounting code of business entity (object)";

1.8.2. in Article 30.2.5 of the word "on tax payments" shall be replaced with words "on taxes, fees on compulsory national social insurance, unemployment insurance and compulsory medical insurance, percent and financial sanctions";

1.8.3. at the end of Article 30.6.15 to replace point with semicolon and to add with Article 30.6.16 of the following content:

"30.6.16. in the body (structure) determined by relevant organ of the executive authority based on request of the body (structure) determined by relevant organ of the executive authority in connection with implementation of the powers.";

1.8.4. add with Articles 30.6-1 and 30.6-2 of the following content:

"30.6-1. Data on removal of the taxpayer from tax accounting, the name and code of types of activity (the main and additional) the taxpayer, the address of the location of business entity (object) of the taxpayer, can be reported by tax authorities and their officials to state bodies (structures) in connection with implementation of the powers by them.

30.6-2. Data on the name and code of types of activity (the main and additional) the taxpayer, can be transferred by tax authorities and their officials to persons making banking activities for the purposes of opening of accounts.";

1.9. under Article 33:

1.9.1. state Article 33.5 in the following edition:

"33.5. Taking into account requirements of Articles 33.3 and 33.4 of this Code the physical person who did not submit the application for registration in tax authority takes on tax accounting on own initiative tax authority about what within 5 days directs it the notification on statement to tax accounting.";

1.9.2. add with Article 33.8-1 of the following content:

"33.8-1. The procedure for statement of the nonresident (except for permanent missions, stipulated in Article the 19th of this Code) performing electronic trading through information Internet resource and the gaining income from provision to residents of works and services according to the procedure of electronic trading, on tax accounting, inventory and removal from accounting in electronic procedure, is determined by the body (structure) determined by relevant organ of the executive authority.";

1.10. in Article 34.7.4 the second offer to exclude;

1.11. state Article 35 in the following edition:

"Article 35. Opening of accounts to taxpayers

35.1. In case of the address of taxpayers after statement on tax accounting in the credit institutions having the right to open and manage bank accounts and to the national operator of mail service (further - persons making banking activities) for opening of the account of person, the making banking activities, open for taxpayers accounts (taking into account the circumstances giving the grounds for refusal in opening of the account on the law) and in tax authority which form affirms the body (structure) determined relevant organ of the executive authority within 1 working day from the date of opening of the account as electronic procedure send information for registration of open accounts (except for the accounts opened for the nonresident not connected with business activity) to tax authority.

35.2. The open account in the automated procedure is registered tax authority in real time based on the arrived data, and to persons making banking activities the notice of registration goes. Persons making banking activities are forbidden to perform account account transactions before receipt of the notice of registration.

35.3. In case of availability at the taxpayer addressed to whom the account is opened of debt to the government budget and off-budget funds on taxes, fees on compulsory national social insurance, unemployment insurance and compulsory medical insurance, to percent and financial sanctions and the expirations, stipulated in Clause 65.1 of this Code, along with the notice of registration on the same day tax authority also the order on this account according to article 65 of this Code goes about what it is specified in the notification.

35.4. To persons performing banking activity on the account with mark that the order of tax authority on the account will be directed making on this account of account transactions in the amount of 105 percent from the amount specified on hand before receipt of the order of tax authority is limited. In case of availability of the money exceeding the means limiting expenditure from the account before receipt of the order of tax authority by persons making banking activities the payment orders of the taxpayer providing expenditure from the account of the specified excessive money are carried out. After revenues to the specified account of the order of tax authority of account transaction also priorities are made with observance of the rules provided by the law.

35.5. In case of transfer of the accounts belonging to taxpayers between the persons making banking activity, branches or structural divisions, persons making banking activity within 1 working day from the date of account transfer direct information on the translated accounts in the form established by the body (structure) determined by relevant organ of the executive authority, electronically in the body (structure) determined by relevant organ of the executive authority.

35.6. When closing with persons making banking activity, the accounts belonging to taxpayers, these persons within 1 working day from closing date of the account send information on it electronically to the body (structure) determined by relevant organ of the executive authority.

35.7. When opening by persons making banking activities, accounts or rendering financial services to legal entities and physical persons they provide observance of requirements of regulatory legal acts of the Azerbaijan Republic, and also requirements of the international treaties providing exchange of tax and financial information which participant is the Azerbaijan Republic.";

1.12. in the second offer of article 37.2 of figure "30" to replace with figures "90";

1.13. add with Articles 38.7.4-1, 38.9 and 38.10 of the following content:

"38.7.4-1. In case of the appeal to competent authority of the foreign country in connection with participation of the representative of tax authority in tax audit in the territory of foreign state within international treaties which participant is the Azerbaijan Republic, for the purpose of receipt of the relevant information or documents in connection with the exit tax audit which is carried out at the taxpayer - before completion of the inspection which is carried out in foreign state.";

"38.9. In the cases provided by international treaties which participant is the Azerbaijan Republic the representative of competent authority of foreign states (territories) in Azerbaijan or the plenipotentiary of tax authority of the Azerbaijan Republic can participate in the exit tax audits which are carried out at the taxpayer performing activities in this foreign state (territory).

38.10. The procedure for the organization of participation of representatives of competent authority of foreign state (territory) in exit tax audit in the territory of the Azerbaijan Republic affirms the body (structure) determined by relevant organ of the executive authority.";

1.14. under Article 50.8:

1.14.1. in Article 50.8.2 to replace the word "INN" with acronym of "INN";

1.14.2. in Article 50.8.5 after the word of "tax" to add with words "rates and";

1.14.3. in Article 50.8.6 "put" shall be replaced with words the word "the current queue", and in this Article before the word "number" to add with the word of "check";

1.14.4. add with Article 50.8.10-1 of the following content, and also at the end of Article 50.8.16 to replace point with semicolon and add with Articles 50.8.17 and 50.8.18 of the following content:

"50.8.10-1. the amount paid for advance payment (deposit) in the advance (zadatkovy) payment check;";

"50.8.17. number of the amount which is subject to payment for credit sale and the sequences of payment, and also symbols described in fiscal signs of the selling (credit) check (the unique identifier);

50.8.18. the state registration sign of the vehicle of the buyer in the selling check for the fuel provided by refueling Items to taxpayers based on the fuel card (coupon).";

1.14.5. in Article 50.8.11 after the word of "goods" to add with the words "or services (work)";

1.14.6. in Article 50.8.13 of the word" (cash or non-cash, advance payment (deposit), the credit, bonus, the gift card and other similar payments)" shall be replaced with words "(cash, non-cash, bonus, the gift card)";

1.14.7. in Article 50.8.14 of the word "or cancellation" shall be replaced with words ", cancellation, advance (zadatkovy) payment, payment for credit sale";

1.14.8. state Article 50.8.16 in the following edition;

"50.8.16. in checks of return, cancellation and selling (advance) checks symbols (unique identifiers) described in fiscal signs by the corresponding checks connected with the specified checks;"

1.15. in Article 56.1 after the words "5 years" to add with words ", and at least 5 years in connection with document storage and the data, stipulated in Clause 71.4 of this Code, and also";

1.16. under Article 57:

1.16.1. state Article 57.1 in the following edition:

"57.1. for non-presentation it is groundless the taxpayer having the taxation objects making taxable transactions or transactions, tax-exempt (not taxable) of the tax report for the accounting period at the scheduled time according to the decision of the head of tax authority (his deputy) the tax sanction in the amount of 40 manats is applied to the taxpayer.";

1.16.2. in article 57.1-2 of figure "500" to replace with figures "10000";

1.16.3. in Article 57.3 after the words "stipulated in Clause 71.4 of this Code" to add with the words "at least 5 years";

1.17. under Article 58:

1.17.1. in Article 58.6 of the word "payment of VAT amount later" shall be replaced with words "failure to pay VAT amount within 1 working day";

1.17.2. in Article 58.7-1.10 after the words "in medical institution" to add with the words "and to the physical persons practising private medicine";

1.17.3. state Article 58.11 in the following edition:

"58.11. For non-presentation in tax authority of information on the account opened in the credit nonresident organizations or nonresident persons making banking activities for the purpose of business activity (except for the correspondent accounts opened by resident banks in nonresident banks) which form is approved by the body (structure) determined by relevant organ of the executive authority before transaction date on these accounts is applied the financial sanction in the amount of 100 percent of cash amount credited into this account to the taxpayer.";

1.17.4. in Article 58.13 after the word "for representation" in the second case to add with words "(except for representations of the goods realized according to the procedure of electronic trading from the warehouses belonging to objects of retail trade, by request)";

1.18. add with Article 59.2-1 of the following content:

"59.2-1. Taking into account provisions of Article 90.3 of this Code charge of percent on the overdue tax liabilities of the credit institutions declared the judgment which took legal effect by bankrupt stops from the date of adoption of the judgment on the announcement of credit institution by the bankrupt.";

1.19. under Article 60:

1.19.1. in the name after words to "credit institutions" to add with words ", to persons making banking activities";

1.19.2. in Article 60.1 of the word "to the banks and other credit institutions performing separate types of banking activities" shall be replaced with words to "the credit institutions and persons making banking activities";

1.19.3. state Article 60.1.1 in the following edition:

"60.1.1. when opening accounts to the taxpayer for non-presentation in tax authority of electronic information according to Article 35.1 of this Code the financial sanction in the amount of in the amount of 400 manats according to each open account, and also on the accounts which are not registered in tax authority or in case of making of account transactions (except for account transactions in the government budget and off-budget funds on fees on compulsory national social insurance, unemployment insurance and compulsory medical insurance) before receipt of the notice of registration, stipulated in Article 35.2 of this Code, - in the amount of 50 percent from committed account transaction is applied to registration of these accounts in tax authority.";

1.19.4. in Article 60.3.3 of the word of "committed transaction" shall be replaced with words "the means credited into the account";

1.20. add with Articles 65.8-1 and 65.10 of the following content:

"65.8-1. In the presence of the order about freezing of money on account transactions in the amount of 105 percent from outstanding amount on current or other accounts of the taxpayer in national or foreign currency according to Article 65.2 of this Code the taxpayer can provide to credit institutions or to persons making banking activities, the payment order concerning transfer of the refrigerated money in the government budget, and specified persons provide money transfer in the government budget in the amount of, specified in the payment order of the taxpayer.";

"65.10. For the purpose of fulfillment of requirements of international treaties which participant is the Azerbaijan Republic based on the appeal of tax authorities of foreign states tax authorities perform the measures for collection of the tax debt which arose in this foreign state, provided by Articles 65.1 - 65.9 of this Code.";

1.21. under Article 76:

1.21.1. in Article 76.1 of the word "information on the bank account and transactions" shall be replaced with words "identification data, information on its bank accounts and transactions, and also the documents confirming this information";

1.21.2. in Article 76.1-1 of the word "based on the certificate duplicate" shall be replaced with words "for the purposes of business activity";

1.21.3. add Article 76.2 with the paragraph the second the following content:

"Irrespective of other provisions of this Article if it follows from requirements of international treaties which participant is the Azerbaijan Republic if in the address (request) which arrived from competent authority of foreign state it is specified about non-presentation to the account holder of the relevant information, the account holder the relevant information does not go.";

1.22. in Article 76-1 of the word "according to the international treaties providing exchange of tax and financial information which participant is the Azerbaijan Republic, legal entities and physical persons of these states" shall be replaced with words "nonresidents", and to replace the words "through body in competent authorities of the specified foreign states" with the word to "body";

1.23. add Article 79.3 with the second offer of the following content:

"The tax liabilities of the banks declared bankrupt are performed according to the payment priority provided by the Law of the Azerbaijan Republic "About banks".";

1.24. under Article 85:

1.24.1. in Article 85.4 after words "after the termination" in the second case of the word" (from the date of the decision passed by results of consideration of materials of exit tax audit about the accrued taxes, percent and financial sanctions during exit tax audit)";

1.24.2. in Article 85.5 after the word of "offsetting" to add with words "after the end of the taxable accounting period (from the date of the decision passed by results of the exit tax audit performed according to Articles 38.3.3 and 38.3.4 of this Code)";

1.25. add with Article 89.15-1 of the following content:

"89.15-1. The property of the credit institutions declared the judgment which took legal effect by bankrupt is not included in the list.";

1.26. under Article 102:

1.26.1. in Article 102.1.7 after the word of "property" to add with words ", and also from representation to taxpayers of the goods specified in article 3.5 of the Law of the Azerbaijan Republic "About clearing settlements" (except for representations of the agricultural products made by producers of agricultural products)";

1.26.2. in Article 102.1.11 of the word "income gained from production" shall be replaced with words "income gained from production (including industrial method), including non-operating incomes of the physical persons who are engaged in production of agricultural products from these activities, and also the subsidies provided to physical persons in connection with production of agricultural products at the expense of means of the government budget";

1.26.3. add with Articles 102.1.11-1 and 102.1-1 of the following content:

"102.1.11-1. dividend incomes of the physical persons who are members of the legal resident persons who are engaged in production of agricultural products (including industrial method) - since January 1, 2023 for a period of 1 year;

102.1-1. the taxable monthly income of parents, widows (husbands) and children of persons which are given the status of family of shekhid from this or that work for hire, decreases by the amount of 800 manats.";

1.26.4. in Article 102.1.14.15 after words of "law enforcement agencies" to add with words "(including the tax authority established by body (organization) determined by the relevant organ of the executive authority performing powers of law enforcement agencies)";

1.26.5. state Article 102.1.15 in the following edition:

"102.1.15. all-in cost of the prizes won in the form of objects at competitions and tenders. The cost of the prizes won at the international competitions (except for sports competitions) and tenders in cash type, - to 4000 manats, and at republican, regional, city and district competitions (except for sports competitions) and tenders - to 200 manats;

All-in cost of the prizes in connection with the international, intercountry sports competitions issued by organizers of the specified competitions and also cost of prizes in connection with intra country sports competitions (republican, regional, city and district levels) issued by republican sports federations (associations) and sports clubs in cash type - to 50000 manats.";

1.26.6. in Article 102.1.22-2 after the word of "period" to add with words "legal resident persons in the territory of the Azerbaijan Republic, and also outside the country";

1.26.7. at the end of Article 102.1.36 to replace point with semicolon and to add with Articles 102.1.37 and 102.1.38 of the following content:

"102.1.37. 50 percent of the income of the individual entrepreneurs performing production of food (food) products on substitution of imported goods which list is approved by the body (structure) determined by relevant organ of the executive authority, goods of local production (conversion) - for a period of 7 years since year of approval of the corresponding list;

102.1.38. the income from the transmission of electricity made by the active consumer who is part of national group to limit of capacity of 150 kW (including 150 kW) at the expense of renewable energy resources in electric utility power grid according to article 10 of the Law of the Azerbaijan Republic "About use of renewable energy resources in case of production of electricity".";

1.26.8. in Article 102.4.2 of the word "and wives (husbands)" shall be replaced with words ", their wives (husbands) and children";

1.27. under Article 106:

1.27.1. add with Article 106.1.14-1 of the following content:

"106.1.14-1. non-operating incomes of the legal entities who are engaged in production of agricultural products (including industrial method), from these activities, the subsidies provided to legal entities at the expense of means of the government budget in connection with production of agricultural products and also dividend incomes of the legal entities who are members of the legal resident persons who are engaged in production of agricultural products (including industrial method), from this sphere - for a period of 1 year since January 1, 2023;";

1.27.2. in Article 106.1.18 of the word "legal entities, 51% or more percent of shares (shares) of which directly or indirectly belong to the state, and" to exclude, and in the same Article in the second case of the word "the body (structure) established by relevant organ of the executive authority" shall be replaced with words "the list of which affirms the body (structure) established by relevant organ of the executive authority";

1.27.3. at the end of Article 106.1.29 to replace point with semicolon and to add with Articles 106.1.30 and 106.1.31 of the following content:

"106.1.30. the payments made by lawyers and lawyer structures in Bar of the Azerbaijan Republic in connection with receipt of order brand;

106.1.31. 50 percent of the profit got by the legal entities performing production of food (food) products on substitution of imported goods which list is approved by the body (structure) determined by relevant organ of the executive authority, goods of local production (conversion) - for a period of 7 years since year of approval of the corresponding list.";

1.28. add Article 115.6-1 with the second offer of the following content:

"If for the end of calendar year according to the procedure, established by this Article, the amount of capitalized costs on repair on each category constitutes less than 500 manats, this amount is subtracted from the income.";

1.29. under Article 128:

1.29.1. in the name of the word "income gained in the countries or the territories" shall be replaced with words "the countries or the territories";

1.29.2. repeal Article 128.1;

1.29.3. state Article 128.2 in the following edition:

"128.2. The foreign country or the territory with the preferential taxation are understood as the following countries or the territories:

128.2.1. the countries or the territories where the rate of tax constitutes 75 and less percent from the rate established by this Code and (or);

128.2.2. the countries or the territories which are not communicating with the Azerbaijan Republic according to the conforming standards within international treaties and (or);

128.2.3. the countries or the territories where there is law on confidentiality of information on the companies which are given opportunity of preserving financial information or secret about the actual owner of property, or the receiver of the income (profit).";

1.30. in Article 144.1.4 of the word "real estate" shall be replaced with words "personal and real estate, intangible assets,", and in the same Article before the word "non-paid" to add with words ", and also in the funds created for the public and social purposes which list affirms bodies (structure), the determined relevant organ of the executive authority);

1.31. under Article 160:

1.31.1. to state the name of Article in the following edition:

"Article 160. Tax-free transactions, including representation of the company";

1.31.2. in Article 160.4 of the word of "real estate" shall be replaced with words "personal and real estate, intangible assets,", and in the same Article before the word "non-paid" to add with words ", and also in the funds created for the public and social purposes which list affirms bodies (structure), the determined relevant organ of the executive authority);

1.32. under Article 164:

1.32.1. in Article 164.1.5 in the first case after the word of "property" to add with words "(except for fixed assets)";

1.32.2. add with Article 164.1.10-1 of the following content:

"164.1.10-1. representation of premises to employers by the body (structure) determined by the relevant organ of the executive authority performing activities in the field of delivery of premises in hiring with the obligation of realization;";

1.32.3. in article 164.1.36 to replace figure "5" with figure "9";

1.32.4. in Articles 164.1.41-1 (in the second case) and 164.1.51 figure "3" to replace with figure "4";

1.32.5. in article 164.1.52 to replace figure "2" with figure "4";

1.32.6. at the end of Article 164.1.58 to replace point with semicolon and to add with Articles 164.1.59 - 164.1.61 following of content:

"164.1.59. the payments made by lawyers and lawyer structures in Bar of the Azerbaijan Republic in connection with receipt of order brand;

164.1.60. import of fixed assets which list is approved by the body (structure) determined by relevant organ of the executive authority;

164.1.61. import of the equipment and spare parts within the project of reconstruction of the body (structure) determined by relevant organ of the executive authority based on the supporting document of the body (structure) determined by relevant organ of the executive authority - for a period of 3 years since January 1, 2023.";

1.33. under Article 165:

1.33.1. at the end of Article 165.1.9 to replace point with semicolon and to add with Article 165.1.10 of the following content:

"165.1.10. investment of fixed assets in the form of share in authorized capital (capital) of the company (if the investment of fixed assets in the form of share is directly not connected with acquisition instead of other property).";

1.33.2. in Article 165.5 after words to add "medical institutions" with the words "and the physical persons practising private medicine", and in the same Article of figure "15" to replace with figures of "17,5", and figure "10" - figure "5".

1.34. state Article 166.3 in the following edition:

"166.3. In case of application of Article 159.6 of this Code time of taxable transaction (including on receivables arising in connection with provision of goods (works, services)), time (day) just before cancellation entry into force is considered.";

1.35. add with Article 169.8 of the following content:

"169.8. Rendering works and services for the purposes of this Chapter by the nonresident registered according to Article 33.8-1 of this Code is not taxed according to this Article, and the tax liability arising on these transactions is calculated and paid by the nonresident according to this Code.";

1.36. under Article 175:

1.36.1. in Article 175.1.3 of the word "no later than" shall be replaced with words "within one working day";

1.36.2. in Article 175.6 before the words "from the VAT" to add with the words "Except for the Case Specified in Article 160.4 of This Code";

1.37. in Article 177.4 of the word "also it is levied" shall be replaced with words ", it is levied and during 1 banking day it is paid to the government budget";

1.38. in article 190.3.14 of figure "30" to replace with figures "22";

1.39. under Article 199:

1.39.1. in Article 199.4.1 of the word", fire protection or civil defense" shall be replaced with words "and fire protection";

1.39.2. add with Article 199.4.1-1 of the following content:

"199.4.1-1. the property of civil defense appointment which is in property (on balance) the companies and which list affirms the body (structure) determined by relevant organ of the executive authority;";

1.39.3. add with Articles 199.17 - 199.19 following of content:

"199.17. The legal entities and physical persons which are engaged in production of food (food) products on substitution of imported goods which list is approved by the body (structure) determined by relevant organ of the executive authority goods of local production (conversion) are exempted from the tax discharge on the property used in the course of these activities, for a period of 7 years since year of approval of the corresponding list.";

199.18. Credit institutions are exempted from the tax discharge on property since month of entry into force of the judgment about the announcement of credit institution by the bankrupt in case of the announcement by her bankrupt based on the judgment which took legal effect.

199.19. According to state programs of privatization of state-owned property in the Azerbaijan Republic the legal entities belonging to the state, the decision on whose privatization is made after January 1, 2023, since year of decision making about privatization are exempted from the tax discharge on property for the term of privatization process, but no more than for 3 years.";

1.40. in Article 201.1.1 after the word "on the basis" to add with the words "according to market value of property for date of insurance";

1.41. add with Articles 202.1. 4, 207.9 - 207.11 following of content:

"202.1.4. In case of the announcement of credit institutions the bankrupt within accounting year residual cost of their property for the beginning of year and date of the announcement develops, shares the bankrupt on 24 and is multiplied on the number of months from the beginning of year before month of the announcement of credit institution by the bankrupt.";

"207.9. Credit institutions are exempted from payment of the land tax since year of entry into force of the judgment about the announcement of credit institution by the bankrupt in case of the announcement by her bankrupt based on the judgment which took legal effect.

207.10. The legal entities and physical persons which are engaged in production of food (food) products on substitution of imported goods which list is approved by the body (structure) determined by relevant organ of the executive authority goods of local production (conversion) are exempted from payment of the land tax for a period of 7 years since year of approval of the corresponding list.";

207.11. According to state programs of privatization of state-owned property in the Azerbaijan Republic the legal entities belonging to the state, the decision on whose privatization is made after January 1, 2023, since year of decision making about privatization are exempted from payment of the land tax for the term of privatization process, but no more than for 3 years.";

1.42. under Article 218:

1.42.1. state Articles 218.5.10 and 218.6.2 in the following edition:

"218.5.10. except the performed works and the rendered services to persons (population) who are not staying on the registry in tax authority as taxpayers, the persons performing works and rendering services (except for performance of works and rendering services by persons provided by Articles 218.4.1. and 220.10 of this Code);";

"218.6.2. irrespective of provisions of Article 218.5.10 of this Code, if amount of subjects to registration of electronic delivery note invoice of transactions in quarter (including the cost of the rendered services and the performed works to the legal nonresident persons and physical nonresident persons performing business activity based on the invoice (invoice) does not exceed 30 percent from amount of cumulative transactions (except for non-operating incomes) on rendering service and performance of works if the persons performing works and rendering services except the performed works and the rendered services to persons (population) who are not staying on the registry in tax authority as taxpayers along with services (works) to the population perform rendering services and performance of works to the legal entities and physical persons staying on the registry in tax authority as the taxpayer.

Provisions of Article 218.6 of this Code are applied as well to cases of making of the mixed transactions consisting of representation of goods, performance of works and rendering services.";

1.42.2. add with Article 218.7 of the following content:

"218.7. In case of dissatisfaction of the conditions provided by Articles 218.6.1 and 218.6.2 of this Code, the right to be payer of the simplified tax is cancelled from the 1st following the specified reporting quarter.";

1.43. add with Chapter XIX of the following content:

"Chapter XIX. Features of the taxation applied in the territories exempted from occupation

Article 226. General provisions about the taxation

226.1. This Chapter regulates the questions connected with the tax releases provided to residents of the territories exempted from occupation in the specified territory, circle of subjects and transactions to which the specified releases are applied. All other questions connected with the taxation in the territories exempted from occupation are regulated according to Chapters I-XVII of this Code.

226.2. For the purposes of this Chapter "the resident of the territory exempted from occupation" are understood as the legal entities and physical persons taken on tax accounting in the territories exempted from occupation and performing activities directly in these territories.

226.3. The tax releases established in this Chapter do not extend to the following types of activity and transactions:

226.3.1. activities in the field of rendering financial services;

226.3.2. services of cargo transportation vehicles;

226.3.3. provision of goods (works, services) by the contractor (except for the resident contractors performing productive activity within the territory exempted from occupation) at the expense of means of the government budget.

Article 227. Releases

227.1. Residents of the territory exempted from occupation are exempted from the income tax (income), property, the earth and the simplified tax since January 1, 2023 for a period of 10 years.

227.2. Import of the equipment, processing equipment and installations on spheres of economic activity and commodity nomenclatures which list is approved by the body (structure) determined by relevant organ of the executive authority, and also raw materials and materials the residents of the territory exempted from occupation registered for the purposes of the VAT since January 1 since 2023 is exempted from the VAT for a period of 10 (ten) years. Provisions of this Article are applied based on the supporting document issued by the body (structure) determined by relevant organ of the executive authority.

227.3. Dividend incomes of shareholders (unitholders) of the legal entities who are residents of the territory exempted from occupation since January 1, 2023 are exempted from tax for a period of 10 years.

227.4. The tax releases provided by this Article are applied under following conditions:

227.4.1. tax release in the field of production, including the overworking and extracting activities, is applied to the taxpayers staying on tax accounting in the territory exempted from occupation and performing these activities in these territories. The tax release provided by this Article extends to income gained for the goods made, including processed or got, and provided within the territory exempted from occupation or outside this territory and also for the goods which are exported from the territory of the Azerbaijan Republic;

227.4.2. tax release in spheres of wholesale trade, construction and services (except for the services rendered to the population) is applied to the legal entities and physical persons taken on tax accounting in the territory exempted from occupation and representing goods (works, services) to residents of the territory exempted from occupation.

In case of representation by these persons of goods (works, services) to persons performing activities outside the territory exempted from occupation including in case of their export by them from the territory of the Azerbaijan Republic, the tax releases provided by this Article do not extend to these persons;

227.4.3. tax release on tourism, retail trade, public catering and other services industries to the population is applied to the taxpayers taken on tax accounting in the territory exempted from occupation and performing activities in these territories;

227.4.4. in case of implementation by the resident of the territory exempted from occupation who is engaged in the types of activity provided by Articles 227.4.1 - 227.4.3 of this Code, along with the territory exempted from occupation the same type of activity performs and outside this territory (within the territory of the Azerbaijan Republic), the tax releases provided by this Article do not extend to these persons;

227.4.5. in case of implementation by the resident of the territory exempted from occupation who is engaged in the types of activity provided by Articles 227.4.1 - 227.4.3 of this Code, along with the territory exempted from occupation other type of activity outside this territory, including outside the Azerbaijan Republic performs, accounting of the income and expenses received from the activities performed in the territory exempted from occupation, and other types of activity performed outside this territory it is made separately on each type of activity.

227.5. The tax releases provided by this Article extend also to the non-operating incomes of resident of the territory exempted from occupation received in connection with activities in this territory.

Article 228. VAT return

30 percent of the VAT paid via bank transfer and 5 percent of the VAT paid by consumers physical persons cash for the services in lodging for the night and accommodation (except for other additional services) rendered by hotels (hotels) recognized by means of placement in the territories exempted from occupation return. The procedure and terms of return of the VAT are determined by this Article according to Article 165.5 of this Code.

Article 229. Delivery of reports

The resident of the territory exempted from occupation represents tax statements about the activities in this territory to tax authority according to the procedure and the terms provided by this Code.".

Article 2. Transitional provision

About year of approval of the list, the stipulated in Article 1.39.2 presents of the Law, property of civil defense appointment of the body (structure) determined by relevant organ of the executive authority (the underground property (escalators, systems of ventilation, cars and other property) and the transitions which are directly connected with underground property), is exempted from the property tax.

Article 3. The introduction of this Law in force

3.1. Article 1.7. 2, 1.8.4 (in relation to article 30.6-2 of the Tax Code of the Azerbaijan Republic), 1.10, 1.11, 1.17. 3, 1.19.1-1.19.3 and 1.21.2 presents of the Law become effective since October 1, 2023.

3.2. Article 1.27.3 (in relation to article 106.1.30 of the Tax Code of the Azerbaijan Republic) and 1.32.6 (in relation to article 164.1.59 of the Tax Code of the Azerbaijan Republic) this Law become effective in day of introduction of amendments to the Law of the Azerbaijan Republic "About lawyers and lawyer activities" in connection with obtaining by lawyers and lawyer structures of order brand.

3.3. Articles 1.30 and 1.31.2 of this Law (in relation to the funds created for the public and social purposes) are applied since January 1, 2022.

3.4. Articles 1.39.1 and 1.39.2 of this Law become effective since year of approval of the list, the stipulated in Article 1.39.2 presents of the Law.

3.5. Taking into account Articles 3.1 - 3.4 presents of the Law this Law becomes effective since January 1, 2023.

 

 

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