President Ilham Aliyev has approved a law amending the Tax Code, as well as the laws "On Banks" and "On Customs Tariffs," following their adoption by the Milli Majlis (National Assembly) on February 13.
According to the Operative Information Center-OMM, the updated legislation stipulates that non-residents conducting e-commerce through internet information resources and earning income from providing works and services to persons not registered with the tax authorities in Azerbaijan must register for tax purposes electronically. This requirement applies once their turnover from services provided to buyers in Azerbaijan exceeds the manat equivalent of $10,000 within a calendar year. Such non-residents are required to register within 30 days of reaching this threshold, while those with a turnover below this limit may choose to register voluntarily.
The new regulations clarify that certain activities are not classified as e-commerce services for the purposes of this article. These include consulting, legal, financial, accounting, design, and engineering services provided via email or other interactive communication tools. Additionally, real-time online educational and training services, as well as online ticket booking services for scientific, educational, cultural, sporting, and entertainment events, are excluded from these specific e-commerce tax provisions.
The procedures for electronic tax registration, re-registration, and deregistration of non-residents (excluding permanent establishments as defined in Article 19 of the Code), as well as the rules for VAT registration, filing VAT returns, and payment of VAT, will be determined by the relevant executive authority. This move is part of Azerbaijan's broader strategy to modernize its fiscal framework and ensure fair competition in the digital economy. By aligning national legislation with international standards for digital taxation, the Cabinet of Ministers aims to increase transparency and regulate the growing sector of cross-border electronic services within the Republic of Azerbaijan.
