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The government has expressed its stance on the proposal to limit VAT on imported food and medicines
The government has expressed its stance on the proposal to limit VAT on imported food and medicines
The government has expressed its position on the proposal to limit the value-added tax (VAT) applied to imported food and pharmaceutical products.
This is reflected in the 2024 report of the Cabinet of Ministers.
It was noted that, according to Articles 102.1.37, 106.1.31, 199.17, and 207.10 of the Tax Code, the list of imported goods, which will replace local products (processed goods), is approved by the Cabinet of Ministers of the Republic of Azerbaijan in Decision No. 22 dated January 15, 2024. Legal and physical entities engaged in the production of food products that replace imports are exempted from 50% of the income (profit) tax from this activity for 7 years starting from 2024. Furthermore, the property and land used in this process are exempt from property and land taxes. Additionally, several exemptions and exemptions are provided for participation in the value chain of food production. For example, the import and sale of wheat, the production and sale of wheat flour and bread, breeding animals, seeds and seedlings, mineral fertilizers, pesticides, seed cultivation, equipment for poultry and beekeeping, including laboratory equipment, machines for cleaning, sorting, or calibrating seeds, grains, and dry legumes, veterinary drugs used for the prevention, diagnosis, and treatment of agricultural animals and poultry, irrigation and other systems, machines, equipment, and agricultural machinery spare parts, as well as the import of raw materials and materials identified by the President of the Republic of Azerbaijan, are exempt from VAT.
When importing medicines, a 0% duty rate is applied in accordance with the Cabinet of Ministers’ Decision No. 500 dated November 17, 2017, "On Approving the Nomenclature of Foreign Economic Activity of the Republic of Azerbaijan, Import Duty Rates, and Export Duty Rates." At the same time, since the majority of food products imported into the country come from countries that are members of the Free Trade Agreement, they are exempt from customs duties under the Agreement. The effectiveness of the proposal to limit VAT on food and pharmaceutical products can be evaluated based on the results of the evaluation, which will be carried out in accordance with the "Methodology for Assessing the Impact of Tax and Customs Exemptions on State Budget Revenues and the Procedure for Maintaining the Registry of These Exemptions" approved by the Cabinet of Ministers of the Republic of Azerbaijan in Decision No. 38 dated February 8, 2020.
The government has expressed its position on the proposal to limit the value-added tax (VAT) applied to imported food and pharmaceutical products.
This is reflected in the 2024 report of the Cabinet of Ministers.
It was noted that, according to Articles 102.1.37, 106.1.31, 199.17, and 207.10 of the Tax Code, the list of imported goods, which will replace local products (processed goods), is approved by the Cabinet of Ministers of the Republic of Azerbaijan in Decision No. 22 dated January 15, 2024. Legal and physical entities engaged in the production of food products that replace imports are exempted from 50% of the income (profit) tax from this activity for 7 years starting from 2024. Furthermore, the property and land used in this process are exempt from property and land taxes. Additionally, several exemptions and exemptions are provided for participation in the value chain of food production. For example, the import and sale of wheat, the production and sale of wheat flour and bread, breeding animals, seeds and seedlings, mineral fertilizers, pesticides, seed cultivation, equipment for poultry and beekeeping, including laboratory equipment, machines for cleaning, sorting, or calibrating seeds, grains, and dry legumes, veterinary drugs used for the prevention, diagnosis, and treatment of agricultural animals and poultry, irrigation and other systems, machines, equipment, and agricultural machinery spare parts, as well as the import of raw materials and materials identified by the President of the Republic of Azerbaijan, are exempt from VAT.
When importing medicines, a 0% duty rate is applied in accordance with the Cabinet of Ministers’ Decision No. 500 dated November 17, 2017, "On Approving the Nomenclature of Foreign Economic Activity of the Republic of Azerbaijan, Import Duty Rates, and Export Duty Rates." At the same time, since the majority of food products imported into the country come from countries that are members of the Free Trade Agreement, they are exempt from customs duties under the Agreement. The effectiveness of the proposal to limit VAT on food and pharmaceutical products can be evaluated based on the results of the evaluation, which will be carried out in accordance with the "Methodology for Assessing the Impact of Tax and Customs Exemptions on State Budget Revenues and the Procedure for Maintaining the Registry of These Exemptions" approved by the Cabinet of Ministers of the Republic of Azerbaijan in Decision No. 38 dated February 8, 2020.