Manufacturers of Water Transport to Be Exempt from Many Taxes

The Ministry of Economy and Industry has drafted a bill on amendments to the Tax Code, according to which manufacturers of water transport in Azerbaijan will be exempt from many taxes.

In the industrial park, created by the decision of the head of state, business entities which are engaged in the production of means of water transport (vessels, platforms, floating structures and their parts) are exempt from paying tax on the source of interest payments, including loan interest on financial leasing operations. These same individuals are exempt from paying tax on the source of payment of rent and royalties.

Tax withholding will not be levied on payments of subjects of the industrial park presenting goods on the territory of Azerbaijan, works and services from subcontractors and contractors - non-residents and certain insurance payments and payments of international communications and transportation.

Import taxes will not be imposed on all types of goods, raw materials, equipment and spare parts necessary for the construction of industrial sites and water transport themselves. VAT on all these goods and services will be charged at a zero rate.

It is planned that after making these changes to the Tax Code, they will come into force on 1 March 2016.

In early June, Garadagh Industrial Park was established. It was given 72 hectares for permanent use (with the right of rent), which is in constant use of SOCAR. At the same time the Government was requested to prepare proposals for stimulating the development of the shipbuilding industry in Garadagh Industrial Park. In 2013 the Baku Shipyard owned by SOCAR (65%), JSC Azerbaijan Investment Company (25%) and Keppel Offshore and Marine were put into operation there. 08D