How are the tax obligations of a publishing house determined?

How are the tax obligations of a publishing house determined?



Starting from 2025, certain amendments have been made to the Tax Code of the Republic of Azerbaijan.
These changes directly affect the tax obligations of legal entities engaged in publishing activities.

This update is commented on by expert Vusal Bayramli.

Publishing houses — enterprises producing books, magazines, newspapers, and other printed materials — may operate either as general taxpayers or, in some cases, under a simplified tax regime.

As a profit taxpayer

According to Article 104 of the Tax Code, resident legal entities of the Republic of Azerbaijan are subject to profit tax. A publishing house must pay 20% of its profit, which is calculated as total annual income minus expenses.

Example 1: In 2025, Publishing House “A” earned an income of AZN 600,000 and incurred expenses of AZN 400,000. The profit and tax liabilities are calculated as follows:
600,000 – 400,000 = 200,000 AZN (profit);
200,000 × 20% = 40,000 AZN (calculated tax amount).

Under Article 151 of the Tax Code, taxpayers with an annual turnover exceeding AZN 200,000 must register as VAT payers. However, according to Article 164.1.1, the sale of books, newspapers, and magazines (non-advertising in nature) is exempt from VAT.

Mandatory social contributions

According to the laws “On Mandatory State Social Insurance,” “On Unemployment Insurance,” and “On Mandatory Health Insurance,” publishing houses are required to pay insurance premiums for their employees as follows:

Mandatory state social insurance – 22% of the salary by the employer and 3% by the employee;

Mandatory health insurance – 2% of the salary;

Unemployment insurance – 0.5% of the salary.

As stated in Article 14.4 of the Law “On Social Insurance,” for insurers not engaged in oil and gas activities and belonging to the non-state sector, the mandatory state social insurance contributions for hired employees are calculated for 7 years (from January 1, 2019) as follows:

For monthly income up to 200 AZN – total 25% (3% employee, 22% employer);

For income above 200 AZN – total 25% (employee pays 6 AZN + 10% of the amount exceeding 200 AZN; employer pays 44 AZN + 15% of the excess amount).

Example 2: The editor of a publishing house earns a monthly salary of 1,000 AZN. The employer will pay 164 AZN in social insurance, 20 AZN in health insurance, and 5 AZN in unemployment insurance:

200 × 22% = 44 AZN;
(1,000 – 200) × 15% = 120 AZN;
44 + 120 = 164 AZN;
1,000 × 2% = 20 AZN;
1,000 × 0.5% = 5 AZN.

The employee, in turn, will pay 86 AZN in social insurance, 20 AZN in health insurance, and 5 AZN in unemployment insurance:

200 × 3% = 6 AZN;
(1,000 – 200) × 10% = 80 AZN;
6 + 80 = 86 AZN;
1,000 × 2% = 20 AZN;
1,000 × 0.5% = 5 AZN.

If the publishing house operates under a simplified tax regime

According to Article 218 of the Tax Code, publishing houses with an annual turnover below AZN 200,000 may be considered simplified tax payers.

Example 3: If the annual turnover is 120,000 AZN, the tax obligation is calculated as follows:
120,000 × 2% = 2,400 AZN.

In addition, publishing houses are also required to pay property and land taxes.
Under Article 198 of the Tax Code, publishing houses with buildings and technical equipment on their balance sheets are subject to property tax.
If a publishing house uses land, under Article 206 of the Code, it becomes a land taxpayer.
The amount of these taxes is determined in accordance with the law, depending on the location, area, and other relevant factors.