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Tax and social insurance exemptions in liberated territories
Tax and social insurance exemptions in liberated territories
We inform you that, starting from January 1, 2023, residents of the liberated territories are exempt from profit (income), property, land, and simplified taxes for a period of 10 years.
According to the provisions of the Tax Code, the tax exemption applies to legal entities and individuals who are registered for tax purposes in the liberated territories and who supply goods (works, services) to residents of these territories.
According to Article 226.2 of the Tax Code, for the purposes of this chapter, a resident of a liberated territory refers to legal entities and individuals registered for tax purposes and directly operating within the liberated areas.
Under the provisions of the Tax Code, if a resident of the liberated territory carries out the same type of activity both within and outside the liberated areas (within the territory of the Republic of Azerbaijan), the tax exemptions provided under this article do not apply. In such cases, the taxpayer must maintain separate accounting of income and expenses for activities carried out within and outside the liberated areas.
The tax exemptions defined in the Tax Code do not apply to the following types of activities and operations:
1. Activities in the provision of financial services
2. Freight transportation services by motor vehicles
3. The supply of goods (works, services) by contractors at the expense of the state budget (excluding resident contractors engaged in production activities within the liberated areas)
Additionally, please note that mandatory state social insurance contributions paid by the employer on income from paid employment are exempt as follows 100% from January 1, 2023, to January 1, 2026, 80% from January 1, 2026, to January 1, 2029, 60% from January 1, 2029, to January 1, 2031, 40% from January 1, 2031, to January 1, 2033.
We inform you that, starting from January 1, 2023, residents of the liberated territories are exempt from profit (income), property, land, and simplified taxes for a period of 10 years.
According to the provisions of the Tax Code, the tax exemption applies to legal entities and individuals who are registered for tax purposes in the liberated territories and who supply goods (works, services) to residents of these territories.
According to Article 226.2 of the Tax Code, for the purposes of this chapter, a resident of a liberated territory refers to legal entities and individuals registered for tax purposes and directly operating within the liberated areas.
Under the provisions of the Tax Code, if a resident of the liberated territory carries out the same type of activity both within and outside the liberated areas (within the territory of the Republic of Azerbaijan), the tax exemptions provided under this article do not apply. In such cases, the taxpayer must maintain separate accounting of income and expenses for activities carried out within and outside the liberated areas.
The tax exemptions defined in the Tax Code do not apply to the following types of activities and operations:
1. Activities in the provision of financial services
2. Freight transportation services by motor vehicles
3. The supply of goods (works, services) by contractors at the expense of the state budget (excluding resident contractors engaged in production activities within the liberated areas)
Additionally, please note that mandatory state social insurance contributions paid by the employer on income from paid employment are exempt as follows 100% from January 1, 2023, to January 1, 2026, 80% from January 1, 2026, to January 1, 2029, 60% from January 1, 2029, to January 1, 2031, 40% from January 1, 2031, to January 1, 2033.