11:40 - 9.01.2023

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January 9, Fineko/abc.az. By the presidential decree from 10 December 2021 "On some measures to accelerate economic growth in the occupation-liberated territories", in order to effectively use the rich resource and infrastructure potential of these territories, revitalize economic activity based on public-private partnership and create favorable business environment, ensure sustainable settlement, tools and measures that make up unity with the priorities of country's long-term development.

Thus, in order to create manufacturing industry and service infrastructure, tax, social insurance and other benefits were introduced for entrepreneurs operating in the liberated territories, additional benefits were provided to them in order to stimulate initiatives, improve mechanisms and attract investments.

With the purpose to ensure the execution of the relevant presidential decree, the relevant bodies have developed optimal benefits and incentive mechanisms to increase investment attractiveness and improve the business climate in the liberated territories, as well as relevant amendments to the Tax Code.

The State Tax Service under the Ministry of Economy of Azerbaijan informs that the main purpose of providing tax benefits is to attract investments to the liberated territories and provide incentives for this area by the state. Therefore, large-scale benefits will be applied to entities registered as residents in these territories.

They will be exempt from paying income tax (income), property, land and simplified tax for 10 years from 1 January. According to the project, this will also apply to the resident's non-permanent income received in connection with his activities in this territory.

Also, since 1 January machinery, technological equipment and installations by branches of economic activity and commodity nomenclature, as well as the import of raw materials and materials by residents who are VAT payers in the territories liberated from occupation, have been exempt from VAT for 10 years. For this purpose, a separate approval of the list of branches of economic activity and commodity nomenclature exempt from VAT is provided.

In addition, the dividend income of shareholders of legal entities that are residents is exempt from taxation for 10 years from 1 January. A number of other tax incentives were also approved, providing for the revival of economic activity in these territories. Considering that the territories liberated from occupation have a wide tourist potential, along with the general benefits provided for in the field of tourism, VAT paid for hotel services will be refunded to consumers.

Thus, for overnight and stay services (with the exception of other additional services) provided by hotels located within these territories, a refund of 30% VAT is provided for non-cash payment, and 5% for cash. The process of VAT refund, along with business, will lead to increased interest in this area and citizens.