Azerbaijan has adopted a ‘Destination VAT principle’ and Value Added Tax (VAT)
currently set between 16 and 21 per cent, (depending on the products) is
payable on the declared value of the goods including assessed import duties and
A 0.5 per cent customs clearance fee is applicable to all imports/exports
with certain minor exceptions.
All goods are subject to an entry fee of 15 per cent, though a limited
number of goods are exempt from the entrance fee (five per cent preferential
Excise duties are 90 per cent on wine and beer, 65 per cent on other
alcoholic beverages and 50 per cent on tobacco. Azerbaijan levies export duties
at the rate of 70 per cent on certain products.
A wholly foreign owned Azeri legal entity (WOFOALE) for taxation, currency
accounting, reporting and other requirements, is considered an Azeri legal
The World Bank has ranked Azerbaijan 141st of 178 countries for
the overall ease of dealing with its taxation system. The Bank has estimated
that it will take a company on average 952 hours per year to handle and to
follow up on the 38 payments necessary to comply with Azeri taxation
requirements. After accounting for various deductions and exemptions, the World
Bank estimates that 40 per cent of commercial profit is payable as tax by a
company during a second year of operation.
(Source: The Federation of International Trade Associations Azerbaijan, October