Tax on property income in Azerbaijan
Effective Tax Rate on Rental Income |
|||
| Monthly Income | €1,500 | €6,000 | €12,000 |
| Tax Rate | 14.00% | 14.00% | 14.00% |
| Click here to see a worked example | |||
| Source: Global Property Guide research |
|||
INDIVIDUAL TAXATION
Nonresidents are taxed on their Azerbaijan-sourced income. Married couples are taxed separately.
Foreign investors may own immovable property in Azerbaijan but they cannot purchase land. Foreign nationals and legal entities may only obtain the right to use land through lease agreements.
INCOME TAX
Income earned by nonresident foreigners is generally taxed at progressive rates, from 14% to 25%.
REDUCED ANNUAL INCOME TAX 2019-2025 |
|
| TAXABLE INCOME, AZN (US$) | TAX RATE |
| Up to 96,000 (US$53,333) | 14% |
| Over 96,000 (US$53,333) | 25% on all income over US$53,333 |
REDUCED ANNUAL INCOME TAX 2019-2025 |
|
| TAXABLE INCOME, AZN (US$) | TAX RATE |
| Up to 8,000 (US$4,444) | 14% |
| Over 8,000 (US$4,444) | 25% on all income over US$4,444 |
The reduced tax rates will be in force for a seven-year period, from 01 January 2019 to 31 December 2025 for employees of the non-public and non-oil and non-gas sectors.
ANNUAL INCOME TAX |
|
| TAXABLE INCOME, AZN (US$) | TAX RATE |
| Up to 30,000 (US$16,667) | 14% |
| Over 30,000 (US$16,667) | 25% on all income over US$16,667 |
MONTHLY INCOME TAX |
|
| TAXABLE INCOME, AZN (US$) | TAX RATE |
| Up to 2,500 (US$1,389) | 14% |
| Over 2,500 (US$1,389) | 25% on all income over US$1,389 |
RENTAL INCOME
Gross rental income earned by nonresidents is taxed at a flat withholding tax rate of 14%. No deductions are allowed.
CAPITAL GAINS
Capital gains are considered as ordinary income and taxed at the standard income tax rates, from 14% to 25%. Capital gains are computed as market value of property or selling price less acquisition costs and related expenses.
PROPERTY TAXATION
Land Tax
Land tax is levied on all land at different rates, depending on the location of the property, property use, and property size. The applicable tax rate varies from AZN1 (US$0.56) to AZN20 (US$11) per 100 square meters.
Property Tax
Property tax is levied at a flat rate of 1% of the fixed asset’s annual residual value.
CORPORATE TAXATION
INCOME TAX
Income and capital gains earned by companies are subject to profits tax at a flat rate of 20%. Income-generating expenses are deductible when calculating taxable income.
Property Tax
Companies are required to pay property tax at a rate of 1% of the fixed assets´ average annual residual value.
Property tax is deductible for profit tax purposes.