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Calculation of tax on income earned by an individual from the sale of shares
Calculation of tax on income earned by an individual from the sale of shares
In 2025, an individual purchased two shares of “Y” JSC, each with a nominal value of 100 USD, on the London Stock Exchange at 50 USD per share, and also paid a 3% commission fee to a foreign investment company based on the sale value of the shares. Later, he sold these shares on the same stock exchange for 200 USD. In this case, how is the tax on the individual’s income from the sale of shares calculated?
According to the State Tax Service under the Ministry of Economy, starting from January 1, 2025, Article 96.6 of the Tax Code stipulates that the taxable object is the difference between the sale price and the purchase price of shares, as well as other incurred expenses, for shares that have been publicly offered and admitted to trading on a regulated market, both within and outside the territory of the Republic of Azerbaijan. The exemption provided in Article 96.5 of the Tax Code does not apply to such transactions.
Therefore, when an individual sells shares on a foreign stock exchange, a 14% tax is levied on the difference between the sale price and the purchase price (regardless of the nominal value of 100 USD), as well as other expenses incurred, including the commission paid to the stock exchange.
In 2025, an individual purchased two shares of “Y” JSC, each with a nominal value of 100 USD, on the London Stock Exchange at 50 USD per share, and also paid a 3% commission fee to a foreign investment company based on the sale value of the shares. Later, he sold these shares on the same stock exchange for 200 USD. In this case, how is the tax on the individual’s income from the sale of shares calculated?
According to the State Tax Service under the Ministry of Economy, starting from January 1, 2025, Article 96.6 of the Tax Code stipulates that the taxable object is the difference between the sale price and the purchase price of shares, as well as other incurred expenses, for shares that have been publicly offered and admitted to trading on a regulated market, both within and outside the territory of the Republic of Azerbaijan. The exemption provided in Article 96.5 of the Tax Code does not apply to such transactions.
Therefore, when an individual sells shares on a foreign stock exchange, a 14% tax is levied on the difference between the sale price and the purchase price (regardless of the nominal value of 100 USD), as well as other expenses incurred, including the commission paid to the stock exchange.