The Tax Code of the Republic of Azerbaijan

Article 162. Volume of the Taxable Import
162.1. The volume of the taxable import shall consist of the value of the goods determined in accordance with the customs legislation of the Republic of Azerbaijan and taxes and duties (without the consideration of VAT and road tax) to be paid after these goods are imported to the Republic of Azerbaijan.
162.2. When rendering a service, which is considered a part of import pursuant to Article 171.2. of this Code, the value (without the consideration of VAT) of such service shall be added to the value stipulated in Article 162.1. of this Code.
Article 163. Adjustment of the Taxable Turnover
163.1. This Article shall apply to the operations on provision of goods, works and services in the following cases:
163.1.1. the operation is fully or partially cancelled, including the full or partial return of goods;
163.1.2. the nature of operation has changed;
163.1.3. the agreed compensation (advance payment) for the operation has been altered because of the reduction of prices or any other reason;
163.1.4. new facts supporting the adjustment of the taxable income arise after the submission of electronic tax invoice by taxpayer and such adjustment is effected in the relevant instructions.
163.2. If, as a result of any of the cases stipulated in Article 163.1., taxpayer
163.2.1. has submitted invoice for VAT and has not correctly indicated the tax amount in that electronic tax invoice;
163.2.2. has not correctly indicated the VAT amount in VAT tax return, adjustments shall be effected in accordance with Article 174.2. and 175.5. of this Code. The adjustment shall be effected in the tax period in which the change in assessment occurred.
Article 164. Exemption from tax
164.1. Along with the export of goods, the following types of the realization of goods, performance of work and provision of services, as well as the following types of import shall be exempt from the payment of VAT:
164.1.1. the value of state enterprise property purchased within privatization program; as well as part of the rent payment for leasing of state property, which shall be paid to the budget;
164.1.2. provision of financial services (including the financial leasing);
164.1.3. supply (sending) and import of the national and foreign currency as well as of securities (except for numismatic purposes);
164.1.4. import of gold to be deposited with the Central Bank of the Republic of Azerbaijan and the State Oil Fund of the Republic of Azerbaijan, as well import of and currency valuables of the Central Bank of the Republic of Azerbaijan, monetary means, anniversary coins and other similar valuables of the Republic of Azerbaijan, manufactured abroad;
164.1.5. investment of any property in the form of share into the charter fund (capital) of enterprise, with exception of imported property (investment of property as a share, if it is not directly related to obtaining of other property);
164.1.6. state fees, payments for permits, charges levied by state power authorities, financial market supervisory body, local management authorities and other authorized agencies and services provided by the above in the exchange of amounts received, fee charged by private notaries (for the conduct of notarial acts and services provided in connection with a notarial acts), within withheld amounts.
164.1.7. purchasing of goods, execution of works and services as well as their export on the expense of credits and loans international organizations, governments of foreign countries, on the expense of credits and loans provided by foreign legal and natural persons on the basis of intergovernmental and interstate agreements, as well as the share of Azerbaijani party if such share not exceeds 49 percents in projects implemented on the expense of such credits and loans;
164.1.7. turnover on all types of purchasing and sale of mass media products, editing, publishing, polygraph activity connected with production of mass media publishing (with exception of advertisement services);
164.1.8. editing, publishingandprinting activitiesin connectionwith the production oftext-books kits (exceptwork books) and children's literatureforeducational institution;
164.1.9. ritual services of undertaking bureaus and cemeteries;
164.1.11. import of property which is the a part of financial leasing;
164.1.10. import of goods, provision of works and services by the Central Bank of the Republic of Azerbaijan and the State Oil Fund of the Republic of Azerbaijan, connected with obligations stipulated by legislation;
164.1.11. operations on provision of fixed assets of any kind, movables and other assets to the State Oil Fund of the Republic of Azerbaijan or party representing the Republic of Azerbaijan, the transfer of which to the Republic of Azerbaijan, including the legal entities representing it, are stipulated according to agreements on exploration, development of oil-gas resources and production sharing, export pipelines and etc., as well as operations of their import;
164.1.12. services on transportation of passengers by Underground;
164.1.13. provision of paid pre-school educational services (except for the provision of services in connection with other activities);
164.1.14. operations on the value of assets set by articles 106.1.9-106.1.11 of this Code and their provision in any form;
164.1.15. import of machinery, technological equipment and plants by managing organizations or operators of industrial and technological parks on the basis of a confirming document of the relevant executive authority for the establishment and construction of infrastructure, production areas of industrial or technological parks, established in accordance with the decision of the relevant body of the executive power, as well as for research and development activities;
164.1.16. import of machinery, technological equipment and plants by legal entities and individuals, engaged in entrepreneurial activities without forming a legal entity, being a residents established according to the decision of the relevant executive authorities of industrial and technological parks, on the basis of a confirming document of the relevant executive authority for the construction of production facilities of industrial or technological parks, established in accordance with the decision of the relevant executive authority, the research and development work - within 7 years from the date of registration of the resident in the industrial or technological parks;
164.1.17. representation of participation interests or shares of a legal entity;
164.1.18. turnoverof agricultural products producers(includingby industrial process) for the saleofagricultural productsproducedby them -5-year period beginning from 1 January2014.
164.1.19 imports of technical equipment and tools of all types, spare parts to them, weapons and ammunition used for military purposes by the relevant executive authority, imports of technology, equipment and component parts for the purpose of defense-oriented development and production;
164.1.20 commodities imported by humanitarian organizations duly registered in the Republic of Azerbaijan, as well as imports by other legal entities and individuals, subject to receipt of a consent from the organization, established by the relevant executive authority, for humanitarian aid purposes;
164.1.21. commodities, imported in connection with gratuitous assistance, including technical assistance, and for charity purposes of countries, governments and international organizations;
164.1.22. commodities, imported by individual not for production or commercial purposes, through the customs border in cases and in the manner, prescribed by the relevant executive authority;
164.1.23. equipment and materials, imported in connection with export-oriented oil and gas activities (subject to provision of the list of equipment and materials, imported to the Republic of Azerbaijan in connection with export-oriented oil and gas activities, approved by the relevant executive authority to the customs authorities);
164.1.24. goods (except for excisable goods), imported to a special economic zone;
164.1.25. imports of fixed assets being a subject-matter of leasing agreements.
164.1.26. Import of technology, technical equipment and facilities by legal persons and individual entrprenuers on basis of approval document given by relevant executive authority – within 7 years by the receipt date of investment promotion certificate;
164.1.27. Import and sale of wheat, manufacture and sale of wheat flour and bread – within 1 year by January 1, 2016;
164.1.28. Import of all kinds of goods for the purposes of those activities on the basis of the approval of the relevant executive authority by the industrial park resident who is involved in activities defined by the relevant executive authority in the industrial park established according to the decision of the executive authority - for a period of 5 years from May 1, 2016
164.1.29. Import and sale of breeder animals;
164.1.30. Import and sale of seeds and seedlings;
164.1.31. Import and sale of mineral fertilizers, pesticides;
164.1.32. Import and sale of equipments for seed breeding, poultry and beekeeping, as well as laboratory equipments and machines for cleaning, sorting or calibration of seeds, grains and legumes;
164.1.33. Import of veterinary drugs used for prevention, diagnosis and treatment of agricultural animals and birds;
164.1.34. Import and sale of direct agricultural irrigation and other facilities, vehicles, equipment and techniques;
164.1.35. Import of raw materials and materials determined by the relevant executive authority.
164.2. Relevant executive authority shall be entitled to grant the VAT exempt for import of goods and equipment used for production purpose, providing advance technologies, stipulated for specific period with provision of development of specific area, in the event of impossibility to satisfy the production needs from local resources.