Consultations on leasing development continue in Azerbaijan

Business Materials 19 August 2009 19:42 (UTC +04:00)

Azerbaijan, Baku, August 19 / Trend , U.Ismayilova/

The Association of Leasing Companies of Azerbaijan (ALCA) has not yet received responses to the recommendations suggested to the government for regulating leasing activities in the country, Association said on August 19. 

"Currently, we are continuing consultations with relevant state structures to address the problems hindering the development of leasing activities in the country," said the Association.

Formerly the chairman of the Association Elchin Ahmadov said that ALCA appealed for eliminating value added tax (VAT) (leasing products are exempt from VAT, but when selling goods the companies are forced to pay 18 percent VAT, which leads to higher prices of the leasing). The second important question for leasing companies is the return of the mechanism of accelerated amortization. Earlier the Tax Code of Azerbaijan contained an item supporting accelerated amortization, but it was liquidated. The Association intends to propose the restoration of the item, which will serve not only the development of the leasing market, but also other spheres of the country's economy.

According to Ahmadov, ALCA also proposed a temporary exemption of profit used for the capitalization from taxation, like the banking and insurance sectors of the economy.

The Association proposes changes and additions to those items of the Civil Code, which governs the leasing market of the country, "according to the requirements of the time." If formerly the Association had planned to develop a separate law to regulate the market, today it is more important to propose changes and additions to Tax and Civil Codes to speed up the development process.

Totally more than 20 leasing companies were registered in Azerbaijan, amongst them, 12-13 companies are active.

Association of Leasing Companies of Azerbaijan was established in 2004 by the companies Ataleasing, Unileasing, Muganleasing. Today, the Association brings together eight companies.

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