--- title: "Azerbaijan tax for new residents 2026: rates and regimes" url: https://settleanywhere.com/countries/azerbaijan/tax/ lang: en updated: 2026-10-10 --- # Azerbaijan tax Tax residence: More than 182 days in any consecutive 12-month period ending in the calendar year. Special regime for new residents: Simplified tax for small businesses and sole entrepreneurs. Checked against official sources on 10 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## Tax residence - More than 182 days in any consecutive 12-month period ending in the calendar year · Resident individual - Non-resident individuals are taxed on Azerbaijan-source income (articles 96.3-96.4). ## Special regimes for new residents Special regime ### Simplified tax for small businesses and sole entrepreneurs 2% tax **Details** - On: Gross revenue from goods, works and services plus non-sales income - Limit: AZN 200k/yr ≈ $118k 2% simplified tax on gross revenue for persons not registered for VAT whose taxable turnover is AZN 200,000 (≈ $118,000) or less in any consecutive 12 months; traders and caterers above that level may also use the system at 6% (trade) or 8% (catering). (source 1) #### Taxed on Gross revenue from goods, works and services plus non-sales income. #### Who it applies to - Person not registered for VAT with taxable operations of AZN 200,000 (≈ $118,000) or less in any month(s) of a consecutive 12-month period. - Persons in trade and public catering with operations above AZN 200,000 (≈ $118,000) may also be simplified-tax payers (article 218.1.2) at 6% for trade and 8% for catering. - Outside Baku the regional rate applies only if production space, real estate and workforce are in that region (article 220.2). #### Exclusions - Activities listed in article 218.4 and other excluded categories in the Code are outside the regime. #### Limits - AZN 200,000 a year (≈ $118,000) · Maximum taxable operations over any consecutive 12 months for the 2% regime #### Visas A foreigner running a business needs an entrepreneurship residence ground; this regime is a tax matter separate from the visa. #### Other taxes Personal income tax on employees, social contributions and VAT (above the threshold) apply separately. Article 220.1-1 sets a 6% rate for cashless POS payments for services to the public for 3 years from 1 January 2026. Checked against official sources on 10 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## Standard rules and foreign-source income Standard rules ### Azerbaijan personal income tax on employment income, including 2026-2028 schedule for non-oil private sector **Details** - On: Monthly employment income (general rates, Tax Code article 101.1) - Limit: AZN 2,500/mo ≈ $1,470 Azerbaijan residents (more than 182 days in a 12-month period ending in the calendar year) are taxed on all income; employment income is taxed at 14% up to AZN 2,500 (≈ $1,470) a month and 25% above, while non-oil private-sector employees pay 3% up to AZN 2,500, (≈ $1,470) 10% to AZN 8,000 (≈ $4,710) and 14% above from 1 January 2026. (source 1) #### Taxed on Monthly employment income (general rates, Tax Code article 101.1); residents' taxable object is all income less deductions, with a credit for tax paid abroad (articles 96.1, 127). #### Who it applies to - Resident individual: actually present in Azerbaijan more than 182 days in any consecutive 12-month period ending in the calendar year; otherwise tested by permanent home, centre of vital interests, habitual abode, then citizenship. - General schedule: 14% up to AZN 2,500 (≈ $1,470); AZN 350 (≈ $210) plus 25% of the excess above AZN 2,500 (≈ $1,470). - Employees of non-oil-and-gas, non-state sector employers, 2026: 3% up to AZN 2,500 (≈ $1,470); AZN 75 (≈ $44) plus 10% from 2,500 to 8,000; AZN 625 (≈ $370) plus 14% above 8,000. 2027: 5% up to 2,500, 10% to 8,000, 14% above. From 2028: 7%, 10% and 14%. #### Exclusions - The non-oil private-sector schedule replaces the earlier 0% band up to AZN 8,000 (≈ $4,710) a month that applied in years before 2026; it applies only to employers outside oil and gas and outside the state sector. #### Limits - AZN 2,500 a month (≈ $1,470) · Upper limit of the lower band in the general schedule and the non-oil private-sector schedule - AZN 8,000 a month (≈ $4,710) · Upper limit of the 10% band in the non-oil private-sector schedule; 14% above #### Days in the country - More than 182 days in any consecutive 12-month period ending in the calendar year · Resident individual #### Tax residence Non-resident individuals are taxed on Azerbaijan-source income (articles 96.3-96.4). #### Visas Tax residence follows days present and ties, not residence permit type. #### Other taxes Social insurance contributions, VAT and simplified tax are separate. Whether a given employer counts as non-oil and non-state is determined by criteria set by the competent executive authority (article 101.1-4). Checked against official sources on 10 Oct 2026 [Change log](https://settleanywhere.com/changes/) ## VAT, social security and other taxes - Personal income tax on employees, social contributions and VAT (above the threshold) apply separately. Article 220.1-1 sets a 6% rate for cashless POS payments for services to the public for 3 years from 1 January 2026. - Social insurance contributions, VAT and simplified tax are separate. Whether a given employer counts as non-oil and non-state is determined by criteria set by the competent executive authority (article 101.1-4). ## Questions people ask ### When do you become a tax resident in Azerbaijan? More than 182 days in any consecutive 12-month period ending in the calendar year (Resident individual). Non-resident individuals are taxed on Azerbaijan-source income (articles 96.3-96.4). ### Who qualifies for Simplified tax for small businesses and sole entrepreneurs? Person not registered for VAT with taxable operations of AZN 200,000 (≈ $118,000) or less in any month(s) of a consecutive 12-month period. A foreigner running a business needs an entrepreneurship residence ground; this regime is a tax matter separate from the visa. ≈ USD figures are approximate: daily reference rates from ExchangeRate-API, dated 12 Oct 2026, refreshed when the site is updated. **Sources (1)** ## Official sources 1. [Tax Code of the Republic of Azerbaijan (articles 13.2.5, 96, 101, 101.1-1, 127, 218, 220)](https://e-qanun.az/framework/46948) · e-qanun.az, official legal acts database of the Republic of Azerbaijan · checked 2026-10-10