Last week, the Milli Majlis (parliament) adopted a draft law on amendments to the Tax Code that comes into effect on January 1, 2013.
According to the chairman of the parliamentary committee on economic policy Ziyad Samadzade, in general these changes are aimed at improving the tax system, reducing the tax burden and increasing the tax culture.
Changes in tax laws consider lowering the maximum income tax rate from 30 per cent to 25 per cent and increasing the maximum monthly taxable income bracket operating at this level since 2008, from 2000 to 2500 manat. In this case, the annual income bracket taxed at a rate of 14 per cent will be increased from the current 24,000 manat to 30,000 manat. Some changes are anticipated in regards to income tax benefits as well.
According to Samadzade, as a result of these changes, annual tax breaks for individuals will exceed 50 million manat. The draft law also includes exemption from income, land and property taxes, business parks in the area of information technology and industries to be established in Azerbaijan.
"It is also planned to exempt the paid services of educational institutions from VAT (the tax rate in Azerbaijan is 18 per cent). This proposal will positively affect the development of education in the country raising the salaries of teachers,"Samadzade said.
A decrease in the maximum rate of income tax from 30% to 25% and the growth of the maximum monthly taxable income from 2000 manats which was established in 2008, to 2500 manats is planned.
This was said on Tuesday by Deputy Minister of Taxes Natig Amirov during his speech at the discussion of the draft law on changes and amendments to the Tax Code, held at the meeting of the parliamentary committee on economic policy.
In addition, there are plans to increase amount of annual income taxable at 14%, from the current 24,000 manats to 30,000 manats. Some proposed incentives on taxed income are also under consideration.
The current tax rate of monthly income:
|
Amount of taxed monthly income |
Amount of tax |
|
up to 2,000 manats |
14 percent |
|
more than 200 manats |
280 manats + 30 percent of the amount , exceeding 2,000 manats |
Proposed version:
|
Amount of taxed monthly income |
Amount of tax |
|
up to 2500 manats |
14 percent |
|
more than 2,500 manats |
350 manats + 25 percent of the amount, exceeding 2,500 manats |
Current taxation rates of annual income of non-business activities:
|
Amount of taxed monthly income |
Amount of tax |
|
Up to 24,000 manats |
14 percent |
|
More than 24,000 manats |
3,360 manats + 30 percent of the amount, exceeding 24,000 manats |
Proposed version:
|
Amount of taxed monthly income |
Amount of tax |
|
Up to 30,000 manats |
14 percent |
|
More than 30000 manats |
4200 manats + 25 percent of the amount, exceeding 30000 manats |