The Tax Code of the Republic of Azerbaijan

Article 115. Deductions for repair expenses
115.1. The amount of repair expenses deductible each year shall be limited to the balance value as of the previous year-end for each category of fixed assets - 2 percent of remaining value at the end of year of category of main assets, specified in Article 114.3.1 of this Code, 5 percent of main assets at the end of year of assets, shown in Articles 114.3.2 and 114.3.3, 3 percent of the remaining value at the year end of the category of main assets specified in Article 114.3.7, and zero (0) percent on main assets, to which the depreciation is accounted, in accordance with value. In event when the actual amount of repair expenses is less than amount established by this limit than the actual amount of repair expenses shall be deductible from income.
In such case the maximum value of expenses in following tax years shall be increased by the difference between the amount of actual repair costs and amount calculated on established limit.
115.2. Amount, exceeding the limit established under Article 115.1 of this Code shall be assigned for increase of residual value of main assets (main asset) at the end of current tax year.
Costs associated with maintenance of main assets, which are not depreciated, for which the wear (depreciation) is not accounted shall not be deducted from income and their balance value is increased.
115.3. The procedure on deduction from income of costs for the repair of leased fixed assets shall be established in accordance with Articles 115.4 - 115.8 of this Code.
115.4. The amount of costs deducted from incomes for maintenance of leased main assets shall be limited by interest range stipulated under Article 115.1 of this Code from the remaining value at the end of previous year for each category of main assets.
115.5. Terms, provisions of transfer of main assets for leasing, as well as costs for their maintenance shall be agreed between the Lesser and Lessee in the contract made, as stipulated under the legislation.
115.6. If repair work is conducted at the expense of Lesser, or Lessee, during the compensation of leasing payment, provisions of Article 115 of this Code shall not be applied to Lesser.
115.7. If the residual value of each category of main assets by the end of previous year is equal to zero, the actual amount of repair costs shall be assigned to residual value of relevant category of main assets and depreciation is calculated in accordance with provisions of this Code.
115.8. Provisions of this Code shall only limit the amount deducted from income for repair and do not prevent from implementation of repairs at the expense of other sources of taxpayers.