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What tax incentives apply to an individual entrepreneur in Nakhchivan?
An individual entrepreneur subject to the simplified tax regime owns a store in the Sharur district and is engaged in the retail sale of food products. Amendments were introduced in 2026 to the legislation granting tax incentives to taxpayers operating in Nakhchivan. In this case, how will these tax incentives apply to the individual entrepreneur?
According to the State Tax Service under the Ministry of Economy, pursuant to the amendments to the Tax Code effective from January 1, 2026, the tax incentives provided under Chapter XIX of the Tax Code for the liberated territories—including exemptions from profit (income) tax, property tax, land tax, and simplified tax (while VAT exemption on imports is subject to different conditions)—have also been extended to the Nakhchivan Autonomous Republic.
The tax exemptions stipulated in Articles 227.1 and 227.3 of the Tax Code apply to residents of the Nakhchivan Autonomous Republic for a period of 10 years starting from January 1, 2026. A resident of the Nakhchivan Autonomous Republic is defined as a legal entity or individual registered for tax purposes in the Nakhchivan Autonomous Republic or through the centralized tax registration system and carrying out activities directly within the territory of the Nakhchivan Autonomous Republic.
Furthermore, under Article 227.4.3 of the Tax Code, the tax exemption for retail trade applies to taxpayers registered for tax purposes in the Nakhchivan Autonomous Republic and conducting their activities within that territory.
Accordingly, the income earned from retail trade by an individual entrepreneur registered for tax purposes in the Nakhchivan Autonomous Republic and operating directly within its territory is exempt from simplified tax for a period of 10 years, effective from January 1, 2026.
Legal basis: Articles 226.4, 227.1, 227.3, and 227.4.3 of the Tax Code.
An individual entrepreneur subject to the simplified tax regime owns a store in the Sharur district and is engaged in the retail sale of food products. Amendments were introduced in 2026 to the legislation granting tax incentives to taxpayers operating in Nakhchivan. In this case, how will these tax incentives apply to the individual entrepreneur?
According to the State Tax Service under the Ministry of Economy, pursuant to the amendments to the Tax Code effective from January 1, 2026, the tax incentives provided under Chapter XIX of the Tax Code for the liberated territories—including exemptions from profit (income) tax, property tax, land tax, and simplified tax (while VAT exemption on imports is subject to different conditions)—have also been extended to the Nakhchivan Autonomous Republic.
The tax exemptions stipulated in Articles 227.1 and 227.3 of the Tax Code apply to residents of the Nakhchivan Autonomous Republic for a period of 10 years starting from January 1, 2026. A resident of the Nakhchivan Autonomous Republic is defined as a legal entity or individual registered for tax purposes in the Nakhchivan Autonomous Republic or through the centralized tax registration system and carrying out activities directly within the territory of the Nakhchivan Autonomous Republic.
Furthermore, under Article 227.4.3 of the Tax Code, the tax exemption for retail trade applies to taxpayers registered for tax purposes in the Nakhchivan Autonomous Republic and conducting their activities within that territory.
Accordingly, the income earned from retail trade by an individual entrepreneur registered for tax purposes in the Nakhchivan Autonomous Republic and operating directly within its territory is exempt from simplified tax for a period of 10 years, effective from January 1, 2026.
Legal basis: Articles 226.4, 227.1, 227.3, and 227.4.3 of the Tax Code.