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Tax exemptions applied to securities traded on the regulated market
Tax exemptions applied to securities traded on the regulated market
We inform you that, according to Article 102.1.22-2 of the Tax Code, as of February 1, 2023, for a period of 5 (five) years, dividends, discount (the difference arising from placing bonds below their nominal value), and interest income paid on shares and bonds publicly offered and traded on a regulated market by resident legal entities, both within the territory of the Republic of Azerbaijan and abroad, are exempt from income tax.
Accordingly, dividends paid on shares publicly offered and traded on a regulated market by resident legal entities, both within the territory of the Republic of Azerbaijan and abroad, are exempt from income tax.
At the same time, according to Article 100.1 of the Civil Code, a joint-stock company whose shares are distributed only among its founders or within a predetermined circle of persons is considered a closed joint-stock company. Such a company may not conduct an open subscription for the shares it issues, nor may it offer them in any other way to an unlimited circle of persons for acquisition.
Furthermore, in the Republic of Azerbaijan, the principles and rules for the issuance, state registration, public offering, depository and post-trade systems, circulation of securities and derivative financial instruments, the organization, management, and liquidation of persons licensed in the securities market and the central depository, the relations concerning the protection of investors’ rights, as well as the legal and economic foundations of regulation and supervision in the securities market, are determined by the Law of the Republic of Azerbaijan “On the Securities Market” (hereinafter – the Law).
According to the provisions of Article 1 of the Law, a regulated market is a system organized and managed by a stock exchange in accordance with its internal rules, which reflects the trading interests of third parties in the securities and derivative financial instruments admitted to trading.
According to the provisions of Article 8 of the Law, the public offering of investment securities is an offer made to an indefinite number of persons, or through mass media, or to more than 50 persons. The public offering of investment securities (excluding shares of joint-stock companies created during the privatization of state enterprises) is carried out through a stock exchange.
We inform you that, according to Article 102.1.22-2 of the Tax Code, as of February 1, 2023, for a period of 5 (five) years, dividends, discount (the difference arising from placing bonds below their nominal value), and interest income paid on shares and bonds publicly offered and traded on a regulated market by resident legal entities, both within the territory of the Republic of Azerbaijan and abroad, are exempt from income tax.
Accordingly, dividends paid on shares publicly offered and traded on a regulated market by resident legal entities, both within the territory of the Republic of Azerbaijan and abroad, are exempt from income tax.
At the same time, according to Article 100.1 of the Civil Code, a joint-stock company whose shares are distributed only among its founders or within a predetermined circle of persons is considered a closed joint-stock company. Such a company may not conduct an open subscription for the shares it issues, nor may it offer them in any other way to an unlimited circle of persons for acquisition.
Furthermore, in the Republic of Azerbaijan, the principles and rules for the issuance, state registration, public offering, depository and post-trade systems, circulation of securities and derivative financial instruments, the organization, management, and liquidation of persons licensed in the securities market and the central depository, the relations concerning the protection of investors’ rights, as well as the legal and economic foundations of regulation and supervision in the securities market, are determined by the Law of the Republic of Azerbaijan “On the Securities Market” (hereinafter – the Law).
According to the provisions of Article 1 of the Law, a regulated market is a system organized and managed by a stock exchange in accordance with its internal rules, which reflects the trading interests of third parties in the securities and derivative financial instruments admitted to trading.
According to the provisions of Article 8 of the Law, the public offering of investment securities is an offer made to an indefinite number of persons, or through mass media, or to more than 50 persons. The public offering of investment securities (excluding shares of joint-stock companies created during the privatization of state enterprises) is carried out through a stock exchange.