Azerbaijan provides benefits for businesses in liberated territories

By Azernews

Azerbaijan provides more benefits for businesses in the country's liberated territories, Azernews reports.

In this regard, instruments and measures were introduced within the president's order “on some measures on the acceleration of the economic development in the liberated territories” dated December 10, 2021.

The order envisages the effective use of rich resources and infrastructure potential of liberated territories, reviving the economic activity based on partnerships between the public and private sectors and creating a favourable business environment.

Thus, tax, social insurance, and other benefits were introduced for entrepreneurs in the liberated territories for the creation of a processing industry and service infrastructure.

Moreover, additional benefits were provided to the entrepreneurs to stimulate initiatives, improve mechanisms and attract investments.

Besides, the relevant structures worked out optimal benefits and incentive mechanisms to increase investment attractiveness and improve the business climate in the liberated territories.

Appropriate amendments were also made to the tax code.

With the purpose of attracting investments to the liberated territories, large-scale benefits will apply to entities registered as residents in these territories.

Therefore, residents of liberated territories will be exempted from paying income tax, property, land and simplified tax for 10 years from January 1, 2023. At the same time, machinery, technological equipment and installations will be exempted from VAT by branches of economic activity and commodity nomenclature, as well as the import of raw materials and materials by residents who are VAT payers in the liberated territories for 10 years from January 1, 2023.

Further, dividend incomes of shareholders of resident legal entities will be exempted from taxation for 10 years from January 1, 2023.

Given the broad tourism potential of the territories VAT paid for hotel services will be refunded to consumers. In this regard, for accommodation and stay services provided by hotels located within these territories, a 30 percent VAT refund is envisaged for non-cash payments, and five percent of VAT will be refunded for cash payments by individuals.

To note, the tax benefits won’t apply to such types of activities and operations as financial services, services for the transportation of goods by road and the provision of goods by the contractor at the expense of state funds budget. The tax benefits cover all areas of the real sector - trade, services, manufacturing, the construction sector, the mining industry and other entities in the liberated territories.