BAKU, Azerbaijan - President Ilham Aliyev has approved amendments extending Azerbaijan’s tax incentives for startups and introducing new benefits for investors and venture funds, with the main provisions taking effect on Jan. 1, 2027.
The legislation amends the Tax and Migration codes, as well as laws on social insurance, customs tariffs, licenses and permits, and public procurement.
For micro and small individual entrepreneurs holding a startup certificate, the income-tax exemption on earnings from innovation activity will be extended to seven years from the current three.
For 10 years from Jan. 1, 2027, individuals will receive tax benefits on income from the sale of securities obtained through crowdfunding platforms when investing in startups and industrial or technology parks. A similar 10-year regime will apply to certain dividends and payments to participants in venture funds.
Payments to foreign providers that do not have a permanent establishment in Azerbaijan will be exempt for 20 years when certified startups or technology park residents purchase eligible cloud computing, infrastructure, software, platform or application programming interface services.
Accredited investors will be allowed to deduct qualifying investments in shares or equity interests from aggregate taxable income. The deduction will be capped at 50% of an individual entrepreneur’s income after expenses.
To qualify, an investor must not be related to the company’s founders or management and must hold the stake for at least three years.
Sources: Vesti Baku; ABC.AZ; Report.