Azerbaijan has prepared draft amendments that could introduce long-term tax incentives from Jan. 1, 2027, for technology-park employees, startups, investors and highly qualified foreign specialists.
The proposed Tax Code changes were discussed by parliament’s economic policy, industry and entrepreneurship committee. The rules would take effect only if the bill is adopted.
Proposed Zero-Income-Tax Regime
Income earned by employees of technology-park residents would be exempt from income tax for 20 years. The break would also cover specialists working outside a technology park when their activity falls within the resident company’s authorized profile.
Large companies would face additional conditions, including requirements tied to export revenue and the placement of those proceeds in Azerbaijani banks or payment organizations. Companies that are at least 51% state-owned would not qualify.
A separate 20-year exemption is proposed for highly qualified migrants. It would apply to income from employment contracts with nonresidents that is earned from sources outside Azerbaijan.
Startups, Shares and Investment
The existing tax break for innovation income earned by holders of startup certificates would be extended from three years to seven.
Income from the sale of shares in micro and small businesses holding a startup certificate or technology-park registration could be exempt for 10 years if the asset was held for at least three years. The same period is proposed for dividends and crowdfunding investment income.
Technology-park employees who have worked for their company for at least a year could receive employer shares free or at a discount without income tax for 10 years.
Payments to nonresidents for cloud computing, digital infrastructure, platforms, software and APIs could also receive a 20-year exemption when the services are not bought for resale. Final terms may change during parliamentary review.
Source: Vesti Baku.