Azerbaijan is considering a 0.9% cashback payment for consumers who make cashless purchases from businesses that are not registered as value-added tax payers.
The mechanism is included in draft amendments to the Tax Code and has not yet taken effect, according to Vesti Baku.
Avaz Guliyev, deputy head of the State Tax Service’s Main Department of Tax Policy, disclosed the proposed changes.
The refund would apply only to cashless payments. Unlike Azerbaijan’s existing “VAT Back” system, which covers purchases from VAT-registered sellers, transactions with non-VAT payers would carry a single cashback rate of 0.9% of the payment.
Tax officials expect the mechanism to encourage customers to demand properly registered sales and help move some small-business turnover out of the shadow economy. The final rules would apply only after the amendments are approved and enter into force.
Freight Carriers Offered Tax Option
The same package proposes a new tax option for individuals and companies engaged in domestic freight transport.
Carriers with annual turnover above 200,000 manats, or about $117,650, would be able to choose a simplified tax equal to 8% of turnover.
A carrier selecting that system would not pay VAT or profit tax. The proposal would offer an alternative to the existing tax regimes rather than automatically exempting all market participants, allowing businesses to choose based on their own calculations.
Regional Hotel Tax Benefits
The draft would also extend for another three years a 75% property-tax benefit for hotels and sanatoriums in Azerbaijan’s regions.
Officials are additionally considering a profit-tax reduction tied to the share of turnover generated by services provided to foreign tourists.