On 18 January 2016 the President of the Republic of Azerbaijan signed a Decree On additional measures in connection with the promotion of investments.
In accordance with the Presidential Decree of 18 January 2016, rules for the issuance of an “Investment Promotion Document” (“IPD”) were approved. The IPD will serve as a basis for granting tax and customs benefits. The issuance of an IPD will be based on the following criteria:
- Areas of industry where investments will be made (to be determined by the Cabinet of Ministers);
- A minimum amount in relation to the scope of an investment project (to be determined by the Cabinet of Ministers);
- The territorial administrative units where investment projects will be performed (to be determined by the Cabinet of Ministers).
Together with an application, the following documents would need to be provided to the Ministry of the Economy of the Republic of Azerbaijan):
- A business plan meeting all of the abovementioned requirements;
- A document confirming an investment of 10% of the minimum amount referred to above with regard to the relevant investment project (though the application also may be evaluated without the submission of such document);
- A copy of the tax registration certificate.
The Ministry of the Economy shall consider the application within 5 business days and shall inform the Ministry of Taxes and the State Customs Committee of the issued IPD within 3 days.
According to draft amendments to the Tax Code and the Law On Customs Tariffs, the tax and customs benefits referred to above will include the following:
- Exemption from income (profits) tax of 50% of the income (profit) of persons who have received an IPD.
- Exemption from VAT on hardware, technological equipment and structures imported by persons who have received an IPD.
- Exemption from assets tax and land tax for persons who have received an IPD.
- Exemption from customs duties of hardware, technological equipment and structures imported by persons involved in investment activities.
All of the above benefits are restricted to 7 years of the date of the issuance of the IPD.