Baku: Azerbaijan is implementing a new condition for the value-added tax (VAT) exemption on passenger cars produced within its borders. This development is part of a proposed amendment to the Tax Code, which was deliberated at a meeting of the Milli Majlis’s Committee on Economic Policy, Industry, and Entrepreneurship.

According to Azeri-Press News Agency, the Tax Code currently provides a VAT exemption for the sale of passenger cars manufactured in Azerbaijan for a decade starting from May 1, 2023. However, the proposed amendment seeks to modify this period. The draft stipulates that from January 1, 2027, passenger cars will be exempt from VAT for seven years, contingent upon the completion of industrial assembly in full production form and the execution of technological operations during painting and welding stages.

Moreover, the amendment outlines VAT exemptions for trucks and their parts. The sale of trucks made in Azerbaijan and the import of spare parts for these trucks by legal entities, for production purposes and upon certification by the relevant executive authority, will also enjoy a 7-year VAT exemption, commencing January 1, 2026.