Baku: Azerbaijan is set to introduce tax incentives aimed at benefiting taxpayers who possess startup certificates, as reported by APA. This initiative is part of proposed amendments to the Tax Code, which were discussed during a meeting of the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship.

According to Azeri-Press News Agency, the draft amendments specify that taxpayers holding startup certificates, along with residents of industrial and technology parks, will enjoy certain financial privileges. For the first three years from the date the certificate is issued, if the total debt from taxes and other obligatory contributions does not exceed 50,000 manats, there will be no directive to freeze outgoing transactions on their funds. This freeze protection applies from the time a complaint is filed with a higher tax authority or court until a decision is legally finalized. However, these benefits will not extend to taxpayers classified as risky.

Currently, Azerbaijan's tax regulations provide a 50% income tax exemption on revenue from the transfer of a participation share or stock owned for at least three years. The new draft proposes a full tax exemption for such income, provided the shares or stock belong to a legal entity with a startup or technopark registration certificate and have been held for the requisite period.

Additionally, under the Law on Investment Funds, accredited investors will be able to deduct 100% of their non-cash investments into venture capital funds and other qualifying entities from their taxable gross income for the year the investment is made. This includes investments into legal entities holding a Startup Certificate or technopark registration, whether through future equity agreements or direct acquisition of newly issued shares.