Ministry of Taxes of Azerbaijan to Set up Commission on Problems of Leasing Market
Azerbaijan, Baku, 21 February / corr. Trend U. Ismayilova/ The Ministry of Taxes of Azerbaijan will set up a Committee studying problems of the leasing market of the country regarding taxation, Azer Mammadov, the head of the Board of the Directors of Association of Leasing Companies of Azerbaijan said on 21 February.
"The decision was adopted on the basis of the talks between International Finance Cooperation and Ministry of Taxes of Azerbaijan," Mammadov said.
Though leasing is the developed area of the finance market of world countries, but it developed in Azerbaijan in early 2000 only. One of the key problems of the leasing market of Azerbaijan is the absence of the appropriate mechanism of value added tax system and to involve leasing operations to VAT.
The project on technical assistance to the International Finance Cooperation by the Funds of Financing Leasing in Azerbaijan and Central Asia has developed proposals for certain changes in the current legislation in leasing, in order to solve the problems of the leasing companies of Azerbaijan in taxation, Teymur Heybatov, the head of the project said on 20 February.
The proposals envisage the introduction of more appropriate mechanism of value added tax (VAT) and to involve the leasing operations to VAT.
"The new mechanism will enable us to count VAT in leasing payments, which is favorable both for the clients as well as the leasing companies," he said. Taxes are levied on the equipments which take part in the leasing operations, while the leasing companies are exempted from VAT.
On 27 October 2004, Association of Leasing Companies of Azerbaijan was founded by Ataleasing, Unileasing, and Muganleasing, within the framework of the project of International Finance Cooperation on technical assistance for the development of leasing in Azerbaijan.
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