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Azerbaijan testing new Tax Free system

Business Materials 17 June 2016 12:01 (UTC +04:00)
Azerbaijan has introduced the Tax Free system
Azerbaijan testing new Tax Free system

Baku, Azerbaijan, June 17

Trend:

Azerbaijan has introduced the Tax Free system, which is currently in a test mode, the country’s Taxes Ministry told Trend June 17.

Tax free is a mechanism of refunding VAT paid by the foreign citizens during purchase of goods not designed for production or commercial needs.

Foreign citizens can benefit from TAX FREE, if the cost of purchased goods per one e-tax invoice is not less than 300 Azerbaijani manats, including VAT.

The goods should be taken out of Azerbaijan’s territory within 90 days from the date of purchase.

Standard VAT rate in Azerbaijan is 18 percent. Regardless of the transfer method, foreign citizens will be refunded the amount of VAT paid for the purchased goods after withholding 20 percent service fee.

How to benefit from Tax Free?

To benefit from Tax Free system, a customer must shop at TAX FREE labeled shops. Customers can refund the VAT paid for the goods they purchased at TAX FREE labeled shops during their departure at the airport.

While purchasing goods at TAX FREE labeled shop customers need to inform a salesperson about the intention to benefit from TAX FREE, show a passport confirming citizenship, and have the salesperson to fill in the electronic tax invoice enabling VAT refund. The salesperson, upon filling in the passport details, will provide the customer with 2 copies of signed and stamped e-tax invoice. The e-tax invoice, along with other information, will contain the amount of paid VAT, as well as the expiry date of VAT refund.

While departing from Azerbaijan, it is necessary to present purchased goods and e-tax invoice along with a passport to the customs checkpoint located at the airport. Customs staff will certify the e-tax invoice with a stamp and return it back to the customer after making relevant notes on it.

As the last step, customers need to present the e-tax invoice given by the customs checkpoint to the correspondent bank. They can receive their refund on foreign or local currency according to chosen method as follows: 1) Cash - immediately after presenting necessary document to the bank 2) Noncash - Within 10 working days from the date of submission, to the bank, of their bank card details to which customers wish to receive the refund.

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