BAKU, Azerbaijan, December 25. The draft law "On Amendments to the Tax Code" and other related draft legal acts prepared for improvement of tax legislation and administration were adopted by Azerbaijan's Milli Majlis (Parliament) in the third reading, State Tax Service under Azerbaijan's Ministry of Economy told Trend.
One of the important changes in the direction of reducing the tax burden of business entities and stimulating entrepreneurial activity is related to the extension of the term of validity of tax exemptions, which expire in 2024. Thus, the term of application of a number of tax benefits provided for by the Tax Code ends on January 1, 2024. Taking into account that benefits applied to producers of agricultural goods are also included in this list, as well as the important role of the agricultural sector in ensuring food security and employment, the benefits in this area are extended for another 3 years.
In addition, according to the Tax Code, turnovers on the sale of feed and feed additives used in livestock and poultry farms, the list of which is approved by the Cabinet of Ministers, from January 1, 2020 are exempt from VAT for a period of 4 years. Thus, as required by the legislation, VAT exemption was applied when selling feed and feed additives approved according to the list directly to livestock and poultry farms. According to the new amendment to the tax legislation, wholesale realization of such products by importers or producers of such products at any stage is exempt from VAT. Thus, it is planned to expand the scope of application of the VAT exemption.
In addition, in a number of other areas, the period of benefits has been extended for another three years. Thus, in connection with the signing of a new agreement between "Baku City Ring" and the "Formula 1" Group of Companies on the extension of the dates of the Grand Prix of Azerbaijan, the term of validity of benefits on profit and VAT in this area has been extended. The period of exemption from VAT for the performance of work and services under a contract with an institution determined by the relevant executive authority at the expense of funds allocated from the state budget for the performance of their duties by public legal entities established on behalf of the state on the approved list was extended.
Also, in accordance with the Law "On Health Insurance", the terms of exemption from VAT for rendering medical services at the expense of the Compulsory Health Insurance Fund of Azerbaijan have been increased. In addition, this privilege is supposed to be applied to the provision of medical services at the expense of means of funds created for public and social purposes according to the approved list, including "Karabakh Revival Fund", YASHAT Foundation and Heydar Aliyev Foundation.