The Tax Code of the Republic of Azerbaijan

Article 145. Liquidation of legal person
144.1. The liquidation of a legal entity shall be treated as a nullification of all participating interests of the participants therein, unless otherwise stipulated in this article.
144.2. If a legal person is liquidated and its asset is transferred to a participant that is a legal person or before the liquidation the participant held 100% of the participating interests in this legal person:
144.2.1. the transfer shall not be treated as the taxable transfer by the liquidated legal entity;
144.2.2. the cost of the assets transferred to the participant shall be equal to the cost of such assets to the liquidated legal person prior to the transfer;
144.2.3. the distribution of the assets shall not be a dividend;
144.2.4. no profit or loss shall be taken into consideration upon the cancellation of the participant’s interest in the liquidated asset;
144.2.5. the balance value of fixed assets of any category shall be transferred to the person gaining such fixed assets.
145.3. This Article shall not apply to the assets depreciated by the method of classifying into categories under Article 114 of this of this Code, unless all assets in the category are transferred at the same time.
145.3. Article 145.2 of this Code shall apply only if the tax agency proves that the main objective of a complete liquidation was not tax evasion.
Article 146. Establishment of a legal person
146.1. The transfer of assets shall not be deemed their alienation in the following cases:
146.1.1. a physical person, or a group of physical persons, transfers one or more assets (with or without any liability) to a legal person in exchange for a participating interest in that legal person;
146.1.2. a physical person, or a group of physical persons, owns 100% or more of the participating interests immediately after the exchange.
146.2. The cost, to the transferee, of the assets to which Article 146.1. of this Code applies shall be equal to the cost, to the transferor, of those assets at the time of the transfer.
146.3. The cost of a participating interest received by exchange stipulated in Article 146.1 of this Code shall be equal to the cost of the assets transferred less any liability transferred.
146.4. This Article shall not apply to the assets depreciated by the method of classifying into categories under Article 114 of this Code, unless all assets in the category are transferred at the same time.
146.4. If the liabilities transferred exceed the cost of the assets transferred, this Article shall not apply to the difference between these amounts.