According to the law On amendments and annexes to the Tax Code which was confirmed by the order of the President of Azerbaijan, from 1 January 2007, a new taxation system will be applied to the persons involved in the housing construction, Trend reports.
In relation with this, the Cabinet of Ministers of Azerbaijan should define the minimal turnover, on base of which the value added tax will be calculated.
In addition, coefficients should be installed depending on the territorial zones of cities and districts of the republic to calculate simplified tax for them. The local executive powers should, within a month, present information as of 1 January 2006 regarding the land allocated for the housing construction and sections for construction. In the future, they will have to quarterly present report for the Taxes Ministry.
This payment system for the construction companies has been intended for two years, in 12,5% out of gross payment for each quarter. It is intended to define the gross amount of the payment which will be divided into 8 equal parts. The Taxes Minister of Azerbaijan, Fazil Mammadov said that the coefficient for each square meter may be defined for outside and center of Baku and it amounts from AZN 10-15 to AZN 150, and may increase up to AZN 200 for the comfortable houses in the center of the capital.
The tax will not be applied to the contractor company, but the owner of the apartment buildings. The necessity of making amendments to the taxation system appeared due to the facts that the construction companies hide their revenues, and the state budget may receive more revenues from the construction boom in the country, said Mr. Mammadov.