Baku: A new condition is being established regarding the exemption of passenger cars manufactured in the territory of the Republic of Azerbaijan from value-added tax (VAT). This development is part of an amendment to the Tax Code approved by President Ilham Aliyev.

According to Azeri-Press News Agency, the Tax Code specifies that the sale of passenger cars manufactured within Azerbaijan is exempt from VAT for a period of 10 years starting from May 1, 2023. A significant change is set to take place from January 1, 2027, as the draft outlines a 7-year VAT exemption on the sale of these cars. The condition for this exemption is that industrial assembly must be conducted in full production form, with technological operations performed at the painting and welding stages.

Additionally, the amendment provides a VAT exemption on the sale of trucks produced in Azerbaijan. Furthermore, the import of spare parts for trucks by legal entities for production purposes will also be exempt from VAT. This exemption will apply for a period of 7 years starting from January 1, 2026, and will require a certification document issued by the relevant executive authority.