Azerbaijan proposes tax exemptions for businesses affected by COVID-19

By Azernews

By Ofeliya Afandiyeva

The Azerbaijani Ministry of Economy has proposed to exempt a number of businesses directly affected by COVID-19 from land and property taxes until January 1, 2021, local media reported on April 23.

According to the draft amendments to the tax legislation, the tax exemption will cover the period of January 1, 2020 and January 1, 2021.

The package of proposals applies to hotel business (hotels and other hotel-type facilities), tour operators and travel agencies; catering services; road passenger transport (intercity and inter-district, intra-city and intra-district), including taxis; transportation and delivery of ordered goods, including food and non-food goods from sellers to buyers; trganization of exhibitions, activity of leisure and entertainment; cinema, theater, museum and concert halls; sports and fitness facilities; preparatory (educational) and advanced training courses, out-of-school educational institutions and psychological centers.

Moreover, the tax exemption will apply to other areas of activity that are fully or partially restricted by the Cabinet of Ministers in order to ensure the health and safety of the population in connection with the spread of the coronavirus pandemic.

Apart from receiving tax exemption, businesses affected COVID-19, will receive a number of tax benefits for a period of one year from January 1, 2020, depending on the tax regime they choose.

It is envisaged to provide a 50 percent discount on the simplified tax and a 75 percent discount on the profit (income) tax regime.

Spheres affected by coronavirus can also receive other relief packages. The ministry proposes to reduce the tax rate on the source of payments for rental real estate from 14 percent to 7 percent.

The Ministry also proposes to exempt these areas from current tax payments and submission of references related to current tax payments for 1 year, as well as extension of the deadline for payment of the last tax for 2019 until September 1, 2020.

The government has proposed other concessions for businesses such as extending the deadline of paying income taxes for taxpayers who are not micro entrepreneurs accrued during 2019 until September 1, 2020; postponing the calculation of interest on compulsory state social insurance and unemployment insurance premiums from April 1, 2020 to January 1, 2021; extending deadline for persons engaged in catering activities registered in VAT (value added tax) to choose the simplified tax method for 2020 from April 20 to September 1.