Minimum Turnover for VAT Payment in Housing Construction Defined in Azerbaijan

Business Materials 27 October 2007 11:43 (UTC +04:00)

Azerbaijan, Baku / Trend corr. I.Khalilova / Azerbaijani Tax Ministry defined the minimum turnover according to which the housing construction company will pay VAT in amount of AZN 225 from 2008.

Natig Amirov, the deputy Tax Minister of Azerbaijan, said coefficients would be allocated to companies taking into consideration the housing construction company defines by order of the Azerbaijani Cabinet of Ministers, during the meeting of parliamentary commission on economic cooperation.

The taxation system on housing construction was changed on January 1, 2007. However, the minimum turnover for VAT will be approved in 2008. Reductive tax payers do not imposed upon VAT while housing construction is exception. Before changes were made in the Tax Code in 2007 h paid property and income taxes.

Such a tax payment system was introduced for two years term. It is planning to define the total payments which will be divided on eight equal parts in order to pay off within two years.

Change of the taxation system on housing construction will not cause increase of taxes, the Ministry reported.

The coefficient of calculation of reductive tax for persons engaged in housing construction in region and cities is 12 zones in Baku - 1-4 zones cover the center of the city (coefficients are established on the level 5; 4.6; 4.2 and 3.8 accordingly), 5-7 - territory around the city (3.4; 3 and 2.6), 8-12 -remote territories (2.2; 1.8; 1.4; 1,1 and 0.8).

Coefficient in Sumgayit and Ganja Cities equal to 1.8; Khankandi, Ali Bayramli, Mingachevir, Nakhchivan, Lankaran, Yevlakh, Shaki, Naftalan, Shamakha, Kazakh, Shamkir, Salyan, Guba, Khachmaz, Zakatala, Jalilabad, Geychay- 0.8; in other villages and settlements- 0.5.