Law of the Azerbaijan Republic About Tax on Property

Law of the Azerbaijan Republic

About Tax on Property

Article 1. Taxpayers The following, except cases specified in the present Law, are taxpayers:

enterprises, companies and organisations (including insurance companies, banks and credit organisations), enterprises with foreign investments that are regarded as legal entities in accordance with legislation of the Azerbaijan Republic, international companies and organisations carrying out economic (business) activity;
affiliated companies and other branches of said taxpayers having independent balance and account;
bureau, agencies and other representations of foreign legal entities (enterprises, companies, banks and other economic and financial organisations), located on the territory of the Azerbaijan Republic;
citizens of the Azerbaijan Republic, foreign citizens and stateless citizens possessing certain property objects on the territory of the Azerbaijan Republic subject to taxation according to the present Law.

Taxpayers specified in the present Article hereinafter are respectively referred to as enterprises and physical persons. Article 2. Objects of taxation For enterprises main resources on their balance are objects of taxation. For physical persons buildings and also water and air transport means (vessels, launches, motor yachts and boats, helicopters and aeroplanes) are objects of taxation. Article 3. Tax rates 1. Enterprises pay tax at a rate of 0,5% of cost of the property being the object of taxation.

2. Physical persons pay property tax on buildings at a rate of 0,1% of their estimated cost, and on transport means at the following rates, in percents of minimum wages against each horse power unit of the engine (0,7375 kWt):

Object of taxation, for each horse power unit (0,7375 kWt)	Annual tax rate, in percents of minimum wages
Helicopters, aeroplanes, vessels	5
Launches and motor yacht	3
Motor boats	1,5

Article 4. Privileges and exemptions in taxation

1. The following are exempted from payment of property tax: a) budgetary companies and organisations, state power and administration bodies, National Bank of the Azerbaijan Republic and its branches, lawyers’ association, extrabudgetary funds;

b) enterprises producing and storing agricultural goods, fish farms if their profits as a result of aforementioned activity constitute not less than 75% of total profits from sale of products (work services);

c) specialised orthopaedic enterprises;

d) educational enterprises and institutions, sport organisations, cultural institutions;

e) religious and national-cultural societies, centres, unions and organisations;

f) voluntary organisations of disabled persons and also other enterprises, companies and organisations wherein number of disabled employees is at least 70 percent of total number of employees;

g) construction companies involved in construction of houses (living premises) and country houses;

h) political parties, trade unions and public companies (except property used for business and commercial activity);

i) scientific research institutes, enterprises and organisations, scientific centres;

j) legal entities established with participation of foreign investments (concerning property contributed to the partnership fund by foreign partner).

2. The following are exempted from payment of tax on buildings except cases of their leasing and also use thereof for business or commercial activity: a) disabled persons (invalids) of the first and second group, participants of the Great Patriotic War of 1941-1945, National Heroes of Azerbaijan, pensioners, families that lost both supporters and large families that lost one supporter;

b) parents and spouses and also children who are unable to work of persons who died as a result of invasion of Soviet Army on 20 January, 1990, military personnel who died as a result of wounds, contusions got when protecting territorial integrity of the Azerbaijan Republic, or when carrying out other obligations of military services, or died as a result of disease in connection with service at the frontier.

Spouses of such persons are granted privileges only if they have not married again; c) military men of urgent service and members of their families during the period of said urgent service;

d) persons that in accordance with the Law of the Azerbaijan Republic «About status and social protection of persons who participated in liquidation of Chernobyl catastrophe and got injured» were granted privileges;

e) physical persons - forced migrants who obtained refugee status in accordance with established legislation, for five years;

f) people working in the sphere of culture and arts and masters of handicraft using special premises (including apartments), houses-museums, art workshops, studio and also persons who opened museums, galleries, libraries and other cultural objects in living premises, for the period of use of such objects as specified.

3. Cost of property of the enterprise estimated with the objective of taxation is decreased by balance (estimated) cost:

objects of living-communal and social-cultural sphere, completely or partially being on taxpayers’ balance;
objects used exclusively in the interests of ecology, fire protection or civil defence;
property used for production and storage of agricultural products, fish farms;
product pipelines, railroads and highways (roads), communicational lines and electric power lines, irrigation systems;
inspection equipment and complexes, stands of State Centre of the Azerbaijan Republic on standards and metrology;
transport means liable to taxation according to the Law of the Azerbaijan Republic «About State Road Fund», satellite communication means;
lands.

4. For newly constructed buildings or new transport means tax is not withdrawn till the end of the year wherein the building was commissioned (registration of transport means).

5. Local (district and city) state executive bodies have the right to exempt, completely of partially some poorly provided families from tax payment.

6. Changes of objects of taxation and tax rates concerning property tax for individual categories of taxpayers might be done by decisions of Supreme Council of the Azerbaijan Republic and Supreme Mejlis of Nakhichevan Autonomous Republic.

Article 5. Procedure of estimation and payment of tax on the property of enterprises 1. With the objective of taxation average annual cost of the property of enterprises is established.

Procedure of estimation of average annual cost of the property of enterprises is established by the Cabinet of Ministers of the Azerbaijan Republic.

2. Tax on property is estimated and paid from the beginning of the year, quarterly, summing up, and at the end of the year recalculation is being done.

3. The sum of estimated tax is put to financial results of the enterprise’ activity. Tax on quarterly and annual estimates is paid within ten days from the date specified for presentation of respective accounting report.

Article 6. Procedure of estimation and payment of tax on the property of physical persons 1. Tax on buildings is estimated every year (estimate on the 1^stof May) by taxation bodies located in the same district. With this objectives communal agencies inform tax inspection bodies every year about estimate cost of buildings (estimate on the 1^stof January).

Not later than on 1 August of every year taxation bodies sent tax bills to taxpayers.

Sum of tax is paid in equal parts, not later than on 15^thof September and 15^thof November.

Concerning tax on buildings being joint property, each of the owners pays tax in proportion with his share in the cost of said property.

2. Tax on transport means is estimated every year (estimate on the 1^stof January) by taxation bodies based on data presented by organisations registering transport means.

Tax on transport means belonging to several physical persons is taken from the person whose name is indicated in registration form for said transport means.

3. Whenever within the year the building or transport means is estranged or passes from one owner to another as legacy, the former owner pays tax for a period from the 1^stof January of current year till beginning of month wherein said owner lost his proprietary right, and new owner pays tax from the month wherein his proprietary right appeared.

4. On demolition of the building or destruction of transport means withdrawal of tax stops from the month wherein said demolition or destruction took place.

5. Whenever within the year the owner received tax privileges, sum of tax shall be recalculated from the month wherein such privileges appeared.

6. Taxpayers who were not subject to taxation in due time shall pay tax for not more than two previous years.

Inaccurately estimated sum of tax shall be recalculated for not more than two previous years.

Article 7. Conclusions 1. Sum of tax on property is transferred to local budgets.

2. Taxpayers bear responsibility for unduly and inaccurate payment of tax in accordance with existing legislation.

3. Rights of taxation bodies and their officials concerning control over observance of the present Law and application of financial and administrative sanctions for its violation, and also procedure of submitting claims are governed by the Law of the Azerbaijan Republic «About State Taxation Body».

4. Instruction on use of the present Law shall be developed and approved by the Main State Tax Inspection of the Azerbaijan Republic on agreement with the Ministry of Finances of the Azerbaijan Republic.

President of the Azerbaijan Republic

Heydar ALIEV

Baku, 24 March, 1995

No 992

Decree of Milli Mejlis of the Azerbaijan Republic

About bringing into effect of the Law of the Azerbaijan Republic
«About Tax On Property» Milli Mejlis of the Azerbaijan Republic decides: 1. To bring into effect the Law of the Azerbaijan Republic «About Tax on Property» from the 1^stof July, 1995.

2. To state that until the legislative acts of the Azerbaijan Republic are brought into accord with the Law of the Azerbaijan Republic «About Tax on Property» legislative acts about local taxes and charges shall be applied which do not contradict to the present Law.

3. The Cabinet of Ministers of the Azerbaijan Republic within one month should:

prepare and present to the National Assembly of the Azerbaijan Republic procedure of estimation of the property belonging to legal entities and physical persons;
to bring its decisions and also normative acts of ministries, state committees and organisation into accord with the present Law;
to present for consideration by National Assembly of the Azerbaijan Republic proposals concerning bringing existing legislative acts into accord with said Law, and also draft of the Law «About Fundamentals of Tax Policy».

Chairman of Supreme Council of the Azerbaijan Republic

R.Guliyev

Baku, 24 March, 1995

No 993

A to Z of Azerbaijan

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