Azerbaijan approves criteria for activities in oil & gas, non-state sectors
Baku, Azerbaijan, Feb. 19
By Ilhama Isabalayeva - Trend:
Azerbaijan's Cabinet of Ministers approved the "Criteria for activities in the oil and gas sector and the non-state sector", Trend reports referring to the Cabinet of Ministers on Feb. 18.
The criteria approved by the Cabinet of Ministers on Feb. 18, 2019, for companies operating in the oil and gas sector and the non-state sector, include:
- the State Oil Company of Azerbaijan and its enterprises, as well as contractors and companies operating under agreements on the shared distribution of production, the main pipeline and other similar agreements, regardless of the type of activity, are in full force;
- foreign or local subcontractors providing services to the above persons: existing subcontractors - in the event that during the last calendar year more than 50 percent of annual revenues are related to the sale of goods or the provision of services to the above companies; subcontractors that will be established during the year, they will receive income tax benefits until the month they begin to provide services or sell goods to the above persons.
If during the calendar year subcontractors who have entered into an agreement with the persons specified in sub-clause 2.1.1 of these criteria, the proportion of income (excluding expenses) under these contracts is higher than 50 percent, then from the first day of the next month to the end of the calendar year, they lose their right to a benefit, regardless of the ratio of incomes growing in the following months (excluding expenses).
Starting next year, the criterion specified in sub-clause 188.8.131.52 of these criteria is taken as the basis for an existing subcontractor.
Non-state sector - legal entities and individuals who are taxpayers, with the exception of public legal entities created on behalf of the state, budgetary organizations, other bodies and structures financed from the state budget, and others owned by state funds, as well as legal entities, whose 51 and higher percent of shares are directly or indirectly owned by the state.
This decision applies from Jan. 1, 2019.