Azerbaijan bets on medical tourism with tax incentives for foreign patients

In an attempt to boost medical tourism, Azerbaijan's tax authorities are introducing a value added tax (VAT) refund for foreign citizens and stateless persons receiving paid treatment in Azerbaijani medical centres. The measure, which is part of amendments to Azerbaijan's Tax Code adopted in the third reading by the Milli Majlis ( Parliament), stipulates that the refund will apply only to non-cash transactions.

The policy is aimed at improving the investment climate in Azerbaijan while encouraging entrepreneurial activity in the growing health and wellness sector. Lawmakers and economic analysts expect the amendments to boost the number of medical tourists and bring a long-awaited inflow of foreign currency into the country.

According to official figures, 2.2 million foreign visitors have visited Azerbaijan this year, up by 28 % from the same period in 2023.

Foreign patients are particularly drawn to Azerbaijan because of country's affordable medical services, which do not compromise on quality. Among the most sought-after treatments are: dental procedures, aesthetic and bariatric surgery, reproductive health and IVF, and ophthalmology.

The bulk of these visitors come from Turkey, which ranks first in the number of inbound medical tourists. Significant flows are also observed from Russia, Georgia and Middle Eastern countries.

In addition to traditional medical procedures, Azerbaijan's unique natural resources and therapeutic landscapes contribute to its attractiveness as a recovery destination.These include mud volcanoes, mineral springs, naphthalane treatment, salt caves in Nakhchivan, and thermal springs.

A VAT refund scheme, similar to duty-free programmes in Europe, addresses the financial burden often associated with cross-border healthcare. By introducing cashless payments for eligibility, Azerbaijani officials also aim to increase transparency in financial transactions and support the digital economy.

‘This initiative is a strategic step to position Azerbaijan as a regional centre for medical and health tourism,’ said economic analyst Togrul Juvarly. ‘The combination of quality medical services, natural healing resources, and now financial incentives make it an attractive option for patients seeking a foreign destination.’

Azerbaijan's growing reputation as a medical tourism destination reflects its broader economic diversification strategy. With its combination of modern medical and traditional therapeutic resources, Azerbaijan aims to become a leading medical tourism destination, catering to patients from the Middle East, Central Asia and elsewhere.