Legislation adopted at the extraordinary session of parliament

  Today an extraordinary session  of the Azerbaijani Parliament adopted a package of laws aimed at improving the business environment, strengthening the guarantees of bank deposits and exemption from taxation. However, the parliament has introduced a 20 percent tax on the export of currency. In particular, the MM adopted amendments to the Tax Code and the law "On Customs Tariff" to encourage investment. In particular, the amendments to the Code provide for a 50% tax breaks on profits or income tax for  seven years, seven years exemption from property tax, land tax and VAT on imports of machinery, equipment and technological installations for projects that have received a document on investment promotion (documents will be issued by the Cabinet of Ministers.) These projects will be exempt from customs duties on imports of machinery, equipment and technological installations.

Parliament also adopted amendments to the Law "On public procurement", giving an advantage to local suppliers and contractors. According to the amendments, if the purchasing organization in the evaluation of bids chooses between domestic and foreign goods (works and services), it must choose the Azerbaijani organizations. It must be so, even if the local company will offer 20 percent of that amount. Previously, in the law "On public procurements" the difference was at 15%, and this requirement is not of a binding nature. Milli Majlis has approved changes in the Tax Code provides for the application of tax holidays in the taxation of interest income on bank deposits of citizens. According to the amendments, from February 1, 2016 interest income of Azerbaijani citizens on bank deposits would be exempt from taxation. These tax holidays are designed for three years.

In addition, the changes also imply exemption from the 10 per cent tax on income from dividends, discounts and interest income on investment securities. According to the adopted law "On deposit insurance coverage" and amendments to the law "On deposit insurance" from February 1, 2016 removed restrictions on the size of bank deposit covered by insurance. This will maintain restrictions on the percentage of contribution to that will be differentiated depending on the deposit currency. The rate on manat deposits would be higher for the increasing interest in the national currency. Currently, the insurance industry covers household deposits of up to 30,000 manats at a rate no higher than 12%. The Milli Majlis has also approved changes in the law "On currency regulation". The amendments provide for the use of the collection of 20% of the volume of foreign exchange remitted abroad for the purpose of direct investments, acquisitions, securities, real estate and land. These fees will not touch the export of currency in the amount of less than $50,000 per year. The restrictions are not applied to the transfer of currency in connection with the cost of medical treatment, education, execution of court decisions and law enforcement agencies for granitsey.-06D-