Doing Business in Azerbaijan 2009 - Azerbaijan Export ...

58 DOING BUSINESS IN AZERBAIJAN
*For detailed information
on interest and penalties
rates please see the table
at the end of this chapter.
For detailed information on
Tax rates please see
Annex 5.
• 4% Insurance payments
• 10% Interest element of financial lease payments
• 10% Other income
The Government of Azerbaijan proposed a reduction of the
corporate profit tax, from the current 22% to 20%, effective from
January 2010.
Interest and penalties*
There are certain interests and penalties applicable for failure to
comply with the tax legislation. For example, interest on
outstanding tax liabilities accrues at a rate of 0.1 percent per each
day of delay.
Losses and bad debts
Losses may be carried forward over the next five years without any
limitations. Losses cannot be carried back. Bad debts may be
deducted from taxable income only if recognized as having no value
in the accounting books of the company and if they were reflected
as income in previous periods.
Losses and bad debts recovered in the future periods shall be
recognized as income in the period of their recovery.
VAT registration
There are detailed requirements for registration and accounting for
VAT, with penalties for non-compliance. Companies with taxable
transactions exceeding a certain threshold (currently approximately
22,500 AZN per three consecutive months) must register as VAT
payers.
Other companies carrying out business activity in Azerbaijan may
voluntarily register. Only registered VAT payers may charge VAT or
claim a credit for input VAT that they pay.