The 7-year tax exemption period is ending: What will the tax rate be?

From 2026, taxes on salaries of employees in Azerbaijan’s non-state sector are expected to increase

This is due to the expiration of the 7-year tax exemption introduced in 2019. It is also forecasted that in 2026, the state budget will receive nearly 30% more revenue from this tax compared to previous years.

In practice, in many sectors, salaries are agreed upon based on the amount remaining after taxes and other deductions. Experts believe this will increase employers’ expenses. Otherwise, shifting the tax burden to employees will lead to reduced wages.

Economist Khalid Kerimli stated that if the exemption period is not extended, 7% more will be withheld from employees’ salaries.

“If this exemption period is not extended, the difference between the currently paid taxes and deductions, as well as payments in January 2026, will result in 7% more being withheld from employees’ salaries,” he emphasized.