Guide to Taxes in Azerbaijan |

Guide to Taxes in Azerbaijan

Considering moving to Baku? Here’s what you should know about the taxes.

Posted on

2 August 2017

Last updated on 2 August 2017
Guide to Taxes in Azerbaijan
As a resident in Azerbaijan, your worldwide income, meaning both from within and outside the country, is taxable. Non-residents only have to pay taxes on income generated from within Azerbaijan. 
Tax residents are individuals who spend more than 182 days per calendar year. 

Tax rates are based on how much you earn. If your annual income is under AZN1, 632, then you won’t be charged tax. If you make over AZN1, 632 but under AZN30, 000, you’ll be taxed at a rate of 14 per cent. If you make over AZN30, 000 a year, then the rate is set at 25 per cent plus a AZN4, 200 fee. 

SEE ALSO: Cost of Living in Azerbaijan

If income has been taxed at source, then there won’t be any income tax or deductions made. 
Withholding tax is withheld from your income at the following rates: 
  • Dividends: 10%
  • Interest (except bank deposits): 10%
  • Rental fees for both movable and immovable property, and royalties: 14%
  • Payments for goods or services provided by a person who’s not registered as an independent entrepreneur: 14% to 25%
There are certain exceptions to income that’s being taxed, including:
  • Wages for diplomatic missions abroad as well as administrative and technical services abroad
  • Payments for medical treatment or education abroad
  • Gifts or inheritance received from family members
  • Allowances for temporary loss of working ability, state allowance and pensions
  • Insurance payments
  • Income from selling real estate that you’ve lived in for at least three years
  • Compensation payments for losses
  • Income from production of agriculture products
  • Income from physically producing crafts, pottery and woo household appliances 
  • Aid paid due to emergency or natural disaster
  • Money won from competitions and tournaments
If you have three children below 23 years old, you will get a monthly rebate of AZN20.