Azerbaijani Association of Leasing Companies Approves proposal of Development of Leasing Law
Azerbaijan, Baku / corr Trend U.Ismayilova / The Azerbaijan Association of Leasing Companies (AALC) has approved to develop a law on Leasing, Azer Mammadov, the chairman of the AALC, said on 25 September.
"The development and adoption of the new law [on leasing] will take much effort and time. In this connection the AALC made a decision to inject changes to the Civil Code," Mammadov said. There is no legislation on leasing activities in Azerbaijan and it is regulated only through the Civil Code.
Mammadov said the decision to develop a law in leasing will be discussed in October in Baku at the General Assembly of AALC.
The major problem of the leasing market in Azerbaijan is double taxation.This tax is applied on the leasing services provided especially. As a result the leasing provider is obliged to pay VAT twice: once for property acquired for financial leasing and payment collected from the client. Therefore, the same transaction is taxed twice and this can be expensive at 18%.
Furthermore, the doubled amortization on technical conveyances of this category has been cancelled and there is a gap which makes the use of sub-leasing impossible.
The association of leasing of Azerbaijan set up its activities on 27 October 2004 operating Ataleasing, Unileasing, Muganleasing companies.