BAKU, Azerbaijan, November 26. The sale of buses manufactured in Azerbaijan, as well as the import of spare parts for bus production, will be exempt from Value Added Tax (VAT), Trend reports.
This subject underwent discussion at today's Azerbaijani Parliament session and was reflected in the proposed modification to the Tax Code.
The amendment outlines that the sale of domestically produced buses and the import of bus spare parts for production purposes will be exempt from VAT from January 1, 2025, for a period of eight years. This exemption will apply to legal entities based on documentation provided by relevant authorities.
The amendment is part of Azerbaijan’s broader efforts to develop a more sustainable, environmentally friendly transportation system and reduce emissions. One of the key goals is to modernize the country's bus fleet.
Additionally, a decree of the President of the Republic of Azerbaijan No. 4265 dated January 13, 2024, on the approval of the "distribution of funds provided in the State Budget of the Republic of Azerbaijan for 2024 for state capital investments (investment expenditures)" approved an allocation of 90 million manat ($52.9 million) from the 2024 state budget for the purchase of electric buses for BakuBus LLC. The decree specifies that these buses will be sourced from local suppliers who will manufacture them within Azerbaijan.
Plans for further funding in this sector are expected to be finalized in the near future, with ongoing work to establish contracts for the local production of electric buses to ensure the country’s bus fleet is increasingly supplied by domestic manufacturing.
Following discussions, the document was put to a vote and approved in the first reading.