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trUnder what circumstances do tax incentives apply to sweet biscuit and wafer manufacturers?
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Under what circumstances do tax incentives apply to sweet biscuit and wafer manufacturers?
Pursuant to Article 106.1.31 of the Tax Code, legal entities engaged in the production of food products included in the list approved by the Cabinet of Ministers of the Republic of Azerbaijan, which are intended to replace imported goods with locally produced (processed) products, are exempt for a period of seven years from the year the list is approved from paying corporate income tax on 50% of the profit derived from such activities. They are also exempt from property tax on assets used in the production process and land tax on the land used for such activities.
The list of food products intended to replace imported goods with locally produced (processed) products was approved by Resolution No. 22 of the Cabinet of Ministers of the Republic of Azerbaijan dated 15 January 2024.
This incentive applies to taxpayers who produce (process) food products by carrying out manufacturing or processing operations on raw materials. The mere wrapping, packaging or labelling of raw materials or finished products, without any manufacturing or processing operations, is not regarded as food production (processing) for tax purposes. Accordingly, the tax incentives provided for under Articles 102.1.37, 106.1.31, 199.17 and 207.10 of the Tax Code do not apply to taxpayers engaged solely in such activities.
Therefore, the tax incentive provided for in Article 106.1.31 of the Tax Code applies to legal entities engaged in the production (processing) of the food products listed in the Cabinet of Ministers' approved list, including sweet biscuits and wafers.
Pursuant to Article 106.1.31 of the Tax Code, legal entities engaged in the production of food products included in the list approved by the Cabinet of Ministers of the Republic of Azerbaijan, which are intended to replace imported goods with locally produced (processed) products, are exempt for a period of seven years from the year the list is approved from paying corporate income tax on 50% of the profit derived from such activities. They are also exempt from property tax on assets used in the production process and land tax on the land used for such activities.
The list of food products intended to replace imported goods with locally produced (processed) products was approved by Resolution No. 22 of the Cabinet of Ministers of the Republic of Azerbaijan dated 15 January 2024.
This incentive applies to taxpayers who produce (process) food products by carrying out manufacturing or processing operations on raw materials. The mere wrapping, packaging or labelling of raw materials or finished products, without any manufacturing or processing operations, is not regarded as food production (processing) for tax purposes. Accordingly, the tax incentives provided for under Articles 102.1.37, 106.1.31, 199.17 and 207.10 of the Tax Code do not apply to taxpayers engaged solely in such activities.
Therefore, the tax incentive provided for in Article 106.1.31 of the Tax Code applies to legal entities engaged in the production (processing) of the food products listed in the Cabinet of Ministers' approved list, including sweet biscuits and wafers.