Azerbaijan has introduced significant amendments to its Tax Code that will come into effect in January 2026. These changes aim to modernize the tax framework, enhance transparency, and align with international best practices. As a leading consulting firm, Civillex LLC breaks down the key updates that every business owner and entrepreneur in Azerbaijan should understand.

Key Changes to the Tax Code

1. Revised Corporate Tax Rates
The corporate income tax rate has been restructured to encourage small and medium enterprises. Businesses with annual turnover below AZN 200,000 will benefit from reduced rates, while larger corporations will see adjustments in their tax brackets to ensure fair contribution.

2. Digital Services Taxation
A new framework for taxing digital services has been introduced. Companies providing digital services to consumers in Azerbaijan — including online platforms, streaming services, and digital advertising — will now be required to register and pay VAT in the country.

3. Transfer Pricing Updates
Transfer pricing documentation requirements have been strengthened. Companies engaging in cross-border transactions with related parties must now prepare comprehensive transfer pricing documentation in line with OECD guidelines.

4. Enhanced Tax Incentives for Foreign Investment
To attract foreign direct investment, Azerbaijan has expanded tax holidays and incentives for companies investing in priority sectors including technology, agriculture, and renewable energy.

How Civillex Can Help

Our experienced tax consultants at Civillex LLC can help your business navigate these changes smoothly. We offer comprehensive tax planning, compliance review, and advisory services to ensure your business remains fully compliant while optimizing its tax position.

Contact us today for a consultation to understand how these changes affect your specific business situation.