The Tax Code of the Republic of Azerbaijan

Article 14. Market value
14.1. Market value - the price of the good (work, service) based on interrelation of demand and supply.
14.2. Unless otherwise stipulated by this article, for the purposes of taxation the price of goods (works, services) fixed for operation (deal) shall be used. Unless otherwise proved this price shall be used as market value.
14.3. The calculation of taxes with consideration of market value can be used:
14.3.1. during barter (swap of goods), import-export operations;
14.3.2. during implementation of deals between interrelated persons;
14.3.3. at price deviation for more than 30 percent (either side) within 30 days from the pricing level applied by taxpayers on analogue or similar goods (works, services);
14.3.4. when insuring the company property for the amount in excess of its depreciation value;
14.3.5. if necessary to establish a minimum amount of monthly rent of real estate (except housing) for tax purposes in compliance with Article 124.4 of this Code.
14.4. The market value shall be determined until the good (work, service) is sold, but not later than 30 days from the moment the good (work, service) is sold at the price established on the closest date (before or after) at appropriate deals on identical (analogue) goods (works, services). The market value of securities shall be determined based on stock exchange rate for identical securities of the same emitter on closest previous date from the moment these securities were sold, only if such rates were announced in accordance with procedure above.
14.5. During the determination of market value, the deal between interrelated persons, as defined in Article 18 of this Code, shall be considered only if their relations did not have any impacts on the result of such deal.
14.6. If provisions of Articles 14.4. and 14.5 of this Code are not applicable, the market value of good (work, service) shall be determined in accordance with requirements of this Article. The regular costs on production and/or marketing (purchase price and residual value) of good (work, service), transportation, storing, insurance and other similar costs shall be considered as well as added values and discounts practiced during deals between non-interrelated persons, that will consider the factor of demand and supply. Specified costs shall be considered also when the good losses its quality or other consumer characteristics or expiration (close expiration) date as well as other similar cases.
14.6.1. Following factors are taken into consideration in determination of the market prices of goods (works, services), which can influence the prices:
14.6.1.1. volume (volume of goods batch) of delivered goods (implemented works and rendered services);
14.6.1.2. obligation execution term, payment provisions;
14.6.1.3. change of demand for goods (works, services) and supply (including seasonal fluctuations of consumer demand);
14.6.1.4. country of origin of goods, place of purchasing or procurement;
14.6.1.5. delivery terms for goods (works, services);
14.6.1.6. the quality level of goods and other consumption indicators;
14.6.1.7. in relation with implemented marketing policy introduction on market of new, non-analogue goods (works, services), or introduction of goods (works, services) to new markets, provision of samples of goods with the purpose of acquiring of consumers;
14.6.1.8. in determination of market prices on execution of works, provision of services, including in the area of repair, construction, installation works, transportation, leasing, education, medical services and other areas, taken into consideration the area of work execution, and provision of services, their qualitative indicators and other circumstances, which can affect the price.
14.6.2. In determination of prices in connection with quality of goods (works, services) below market price, quality levels are confirmed by competent person.
14.6.3. If on relevant goods (works, services) market with similar or same kinds of goods (works, services) no operations are conducted, and it is not possible to collect the information on market prices of these goods (works, services) from official or open sources, following evaluation methods can be applied:
14.6.3.1. On the basis of subsequent (secondary) selling price
Market prices of goods (works, services) are determined on the basis of subsequent (secondary) selling price of these goods (works, services). The market price is determined with deduction of applied raise from subsequent selling price.
14.6.3.2. On the basis of value accumulation method
Market prices are calculated with accumulation of costs and profits, motivated by the party providing goods (works, services).
14.6.3.3. If market prices of goods (works, services) can not be determined by one of the methods established in this Article, market prices are determined by contractor expert.
14.6.4. Determined market prices are used only for the purposes of taxation and goods (works, services) are considered by actual selling price in accordance with procedures stipulated under the legislation.
14.6.5. If the purchasing price of purchased goods (works, services) exceeds the market price for more than 30 percent and its value contains costs deducted from income, the value of these goods (works, services) is assigned for costs deducted from the income on market values, and taxes are re-calculated in following cases:
14.6.5.1. in cases, if unreasonable increase of actual of purchasing price of purchased goods (works, services) is detected;
14.6.5.2. if it is not possible to determine the supplier of goods (works, provider of services).
14.6.6. If the price level applied to provided goods (works, services) of taxpayers, will significantly be below 30 percent level of market values, determined on the basis of this Code, then taxes are calculated on the basis of market prices, and if exceeds it, then on actual provided prices
14.7. The complex of deals, providing the delivery of goods (works, services) by one party and their exchange for other goods are the part goods swapping (works/services swapping) deals. The market value of delivered (purchased) goods (works, services) on the basis of such deals shall be determined in accordance with provisions of this Article.
14.8. The taxpayer holds the right to submit to state tax authority the evidences that market values for goods (works, services) are determined in certain deals in accordance with the procedure that differs from one stated in this article.
14.9. During the determination and recognition of goods (works, services) market value the official sources of information on market values of goods (works, services) and exchange rates, databases of state and local authorities, information submitted by taxpayers to state tax authorities, information of advertisement sources and other appropriate information shall be used.
14.10. During provision and purchasing of goods (works and services) (with exception of exports, prices for which are regulated by the relevant executive authority, for the purposes of taxation are used the prices, established by the relevant executive power authority.