Baku, Azerbaijan, Aug. 10
By Anvar Mammadov – Trend:
More than 104 million manats of value added tax (VAT) have been refunded to citizens of 45 countries since June 16 when the Tax Free system was introduced in Azerbaijan, the country’s Deputy Taxes Minister Ilkin Valiyev said.
He made the remarks at a press conference dedicated to execution of the Azerbaijani president’s order, dated Aug. 4, 2016, “On improvement of tax administration and approval of directions of reforms in taxation in 2016.”
“This demonstrates that the system is in a very high demand,” Valiyev added. “It currently operates only at the Baku Heydar Aliyev International Airport, but soon it will be used at all other checkpoints of Azerbaijan.”
Head of Taxpayers’ Services Main Department Mahir Rafiyev, in turn, told reporters that expanding the Tax Free system doesn’t mean the inclusion of persons and goods not covered by the Tax Free.
“The expansion of this system means that it will be used at all checkpoints of Azerbaijan,” said Rafiyev, adding that the list of persons and goods not covered by Tax Free won’t be changed.
Foreign citizens can benefit from tax free system, 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 stores. Customers can refund the VAT paid for the goods they purchased at Tax Free stores during their departure at the airport.
While purchasing goods at Tax Free stores 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 two 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.
At 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) non-cash – Within 10 working days from the date of submitting to the bank their bank card details to which customers wish to receive the refund.