Tax In Azerbaijan

A Contractor's Guide to Taxes : 

One of the most consistently challenging aspects of contracting in Azerbaijan is complying with the country’s tax system. As well as paying tax in Azerbaijan, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income: 

If you’re working in Azerbaijan under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Azerbaijan for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Azerbaijan, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Azerbaijan through PAYE is left with the prospect doing everything themselves.

Do you know much about Azerbaijan Tax Law? Does Azerbaijan have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Azerbaijan can range from 0 to 25 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator: 

If you are a contractor and want a calculation on your tax and net retention in Azerbaijan, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax : 

Contractors in Azerbaijan are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. An Azerbaijani umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Azerbaijani taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Azerbaijani tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax: 

We work with numerous umbrella companies in Azerbaijan, many of whom are experts in tax and immigration laws. If you have any questions about tax in Azerbaijan, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Azerbaijani work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Azerbaijan but without the overhead of directly dealing with the Azerbaijani tax authorities. Get in touch with us today for some reliable advice on tax in Azerbaijan!

When Do You Need to Lodge Your Tax Return?: 
31 March (following the income tax year)
Tax Filing Deadline : 
31 March (following the income tax year)
Can you file it online? : 
Yes, https://login.e-taxes.gov.az/login/
Currency: 
Azerbaijani Manat (AZN)
Tax-free Threshold in: 
AZN1,860
Grossed Income: 
0 - 1,860
Tax Rate: 
0%
Grossed Income: 
>1,680 - 30,000
Tax Rate: 
14%
Grossed Income: 
>30,000
Tax Rate: 
25%
How long does it take to set up: 
4.5 days
How much does it cost: 
AZN15 + AZN18 per e-Signature
Is it easy? : 
Starting a Business Rank: 18/180 (Source: World Bank)
How to File Taxes in: 

The simplest way to file taxes in Azerbaijan is online. Alternatively, taxes can be filed via the BTP program which is a downloadable software from the Ministry of Taxes of the Republic of Azerbaijan website.

It is recommended that you consult a tax specialist and/or translator when you file your taxes, as the Ministry of Taxes website is in Azerbaijani.

Step 1: Obtain an ‘Easy Signature’

Easy Signature (Mobile Signature) allows a user to access any Ministry of Taxes e-Service.

  1. Obtain an Easy Signature SIM Card from any mobile provider (for example, Azercell, Bakcell, Nar Mobile).
  2. Sign a certificate at a ASAN Service Centre or tax service centre.

Alternatively, you can apply for an Easy Signature at your nearest ASAN Service Centre. There, you will be given the relevant instructions and application forms.

You may also log in using a VN ASXM Digital ID card (which can be obtained at an ASAN Service Centre) or a RYTN ‘e-Signature’ card (which can be obtained here).

Step 2: Log In

Log in to the Azerbaijani tax authority’s online tax declaration portal here.

Step 3: Complete and Submit Tax Return

Follow the prompts and fill in the required information. Comprehensive instructions (in Azerbaijani) on filling in the tax forms can be found here.

Notes: 

Exemption for Investment Promotion Certificate Holders: Individuals who hold an investment promotion certificate for 7 years from the date of obtaining the certificate may be granted a 50% exemption from personal income tax.

Does the 183 day rule apply in: 

Yes

When do you become a tax resident in: 

You become a tax resident in Azerbaijan when:

  • You stay in Azerbaijan for at least 183 days in a calendar year; or
  • You stay in Azerbaijan for less than 183 days in a calendar year but Azerbaijan is your place of permanent stay, centre of vital interests, regular place of residence and/or you are an Azerbaijani citizen.

You and your family members are not regarded as staying in Azerbaijan if you are an official with a diplomatic/consular status, you are an employee of an international organisation, or you are a foreign national engaged in state service of foreign states, unless you are engaged in entrepreneurial activities.

Am I taxed on my global income in: 

Tax residents are taxed on their global income. Non-residents are taxed on their Azerbaijan-source income only.

Client comment

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Shell International Trading & Shipping