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Foreign citizens will also be able to reclaim VAT – what has changed?
Foreign citizens will also be able to reclaim VAT – what has changed?
In order to ensure a more convenient and transparent system for the process of refunding part of the value-added tax (VAT) to taxpayers, changes have been made to the Tax Code regarding this mechanism starting from 2025. This innovation is commented on by expert Sabina Mirzayeva.
According to the Tax Code, the refund of part of the VAT by individual consumers (excluding petroleum and gas products, cars, alcoholic beverages, and tobacco products) is as follows: 17.5% of the VAT amount paid without cash is refundable, while 5% is refundable if paid in cash (except for the VAT refunded for services related to theater performances, film screenings, museum visits, and symphonic orchestra concerts).
Based on the amendments made to Article 165.5 of the Tax Code, starting from July 1, 2025, only 50% of the VAT paid non-cash for services related to theater performances, museum and exhibition tickets, symphonic orchestras, and film screenings will be refundable. In this case, the receipt from the cash register machine must meet the requirements of the Tax Code. The main purpose of the innovation is to increase interest in cultural and artistic events in the country, encourage the population to participate in these events, and support the development of the cultural sector by the state.
Example: A citizen purchases a non-cash ticket for a symphonic orchestra concert for 59 manats in September 2025. Of this amount, 50 manats is the ticket price, and 9 manats is the VAT. Based on the amendments made to the Tax Code, the citizen will be able to refund 50% of the VAT amount, which is 4.5 manats.
For foreign citizens and stateless persons who purchase goods in the territory of the Republic of Azerbaijan (except for production and commercial purposes), the VAT paid will be refunded according to the rules determined by the relevant executive authority. Furthermore, based on changes in the Tax Code, VAT paid for services provided by medical institutions and private individuals engaged in private medical practice to foreigners and stateless persons will only be refunded if paid by non-cash means. This is because the VAT refund procedure does not apply to cash payments. This change applies when such persons leave the country within 90 days. Foreign citizens can process VAT refunds either at a special point near the place where the medical service was provided or through the online tax refund portal. The amendments made to the Tax Code regarding VAT refunds aim to make the process of reclaiming VAT simpler and more transparent for both local and foreign taxpayers.
In order to ensure a more convenient and transparent system for the process of refunding part of the value-added tax (VAT) to taxpayers, changes have been made to the Tax Code regarding this mechanism starting from 2025. This innovation is commented on by expert Sabina Mirzayeva.
According to the Tax Code, the refund of part of the VAT by individual consumers (excluding petroleum and gas products, cars, alcoholic beverages, and tobacco products) is as follows: 17.5% of the VAT amount paid without cash is refundable, while 5% is refundable if paid in cash (except for the VAT refunded for services related to theater performances, film screenings, museum visits, and symphonic orchestra concerts).
Based on the amendments made to Article 165.5 of the Tax Code, starting from July 1, 2025, only 50% of the VAT paid non-cash for services related to theater performances, museum and exhibition tickets, symphonic orchestras, and film screenings will be refundable. In this case, the receipt from the cash register machine must meet the requirements of the Tax Code. The main purpose of the innovation is to increase interest in cultural and artistic events in the country, encourage the population to participate in these events, and support the development of the cultural sector by the state.
Example: A citizen purchases a non-cash ticket for a symphonic orchestra concert for 59 manats in September 2025. Of this amount, 50 manats is the ticket price, and 9 manats is the VAT. Based on the amendments made to the Tax Code, the citizen will be able to refund 50% of the VAT amount, which is 4.5 manats.
For foreign citizens and stateless persons who purchase goods in the territory of the Republic of Azerbaijan (except for production and commercial purposes), the VAT paid will be refunded according to the rules determined by the relevant executive authority. Furthermore, based on changes in the Tax Code, VAT paid for services provided by medical institutions and private individuals engaged in private medical practice to foreigners and stateless persons will only be refunded if paid by non-cash means. This is because the VAT refund procedure does not apply to cash payments. This change applies when such persons leave the country within 90 days. Foreign citizens can process VAT refunds either at a special point near the place where the medical service was provided or through the online tax refund portal. The amendments made to the Tax Code regarding VAT refunds aim to make the process of reclaiming VAT simpler and more transparent for both local and foreign taxpayers.