Azerbaijan, Baku, 10 April / Trend A.Akhundov /
The State Securities Committee (SSC) of Azerbaijan will finalise proposals to specify the procedure for taxation of investment funds by the end of the year. This was said to reporters by SSC chairman Rufat Aslanly.
"It's not just about the provision of benefits. There is a need to clarify the tax environment and processes in the stock market. Since this is a relatively new area, the tax legislation of Azerbaijan covers fiscal policy of these processes at large. Therefore, the State Programme on development of capital markets in 2011-2020 provides for taking certain measures. We have already begun a study with the assistance of international experts and plan to finalise the proposals by the end of the year," Aslanly said.
According to him, the SSC has not received any appeal on the establishment of investment funds.
"Investment funds were intensively created in the last century and the beginning of this one. Globally, there is a lack of inspiration in the creation of funds. Azerbaijan is interested in this, conducting research and preparation work. However, we have not yet received an exact formal appeal," Aslanly said.
The Law 'On Investment Funds' was adopted by the Parliament of Azerbaijan on October 22, 2010. This was a significant milestone in the development of Azerbaijani Investment Law.
Under the legislation, investment funds may be established in Azerbaijan in the form of joint-stock investment funds and unit investment trusts. The law distinguishes three types of mutual funds, open, interval and closed, depending on the contractual rights to purchase the unit.
In the open-ended mutual fund investment units a holder may at any time require from the management company the redemption of all or part of the shares and thereby terminate the contract.
With regard to the interval fund, such a right is restricted for a period established by rules of the trust management of mutual funds. That is, holders of shares may demand repurchase from time to time and for a certain interval.
Holders of shares of closed-end mutual funds do not have the right to require from the management company the termination of the trust agreement before it expires.
The Law 'On Investment Funds' also establishes a special system for licensing such funds.