Changes to a number of new laws and legislative acts come into force in Azerbaijan from today. These normative acts mainly cover the fields of social security, taxation, finance, social insurance and public administration.
Publika.az Referring to Oxu.Aza, it presents the laws that come into force on the first day of the year:
“On the 2026 state budget” Law. According to the law approved by the Milli Majlis on December 9, 2025, budget revenues will amount to 38 billion 609 million manats, and expenses will amount to 41 billion 703 million 600 thousand manats.
In addition, the Tax Code is being amended, which covers 145 areas under 45 main articles, consisting of three blocks.
According to the amendment, the features of taxation and tax exemptions applied in the liberated territories will also apply to Nakhchivan. According to the document, the term “resident of Nakhchivan” means legal and physical persons registered in the Autonomous Republic or centrally and operating directly in the territory of the Nakhchivan Autonomous Republic.
Residents will be exempted from profit (income), property, land and simplified tax for 10 years from January 1, 2026.
Also, from January 1, the following shall come into force in relation to Nakhchivan:
– Dividend income of shareholders (shareholders) of resident legal entities will be exempt from tax for 10 years from January 1, 2026;
– The import of raw materials and materials for production, scientific-research and experimental design work by legal entities and individual entrepreneurs who are residents of industrial or technology parks located in the territory of Nakhchivan and are residents of industrial or technology parks located in the territory of Nakhchivan will be exempted from VAT for a period of 10 years from January 1, 2026, based on the confirmation document of the body (institution) determined by the relevant executive authority.
– The import of raw materials and materials for the purpose of rendering production and services (doing work) by legal entities and individual entrepreneurs who are residents of Nakhchivan and individual entrepreneurs determined by the relevant executive authority will be exempted from VAT for a period of 10 years from January 1, 2026;
– The import of machinery, technological equipment and installations, as well as raw materials and materials for the purpose of production, by legal entities and individual entrepreneurs who are residents of industrial districts located in the territory of the Nakhchivan Autonomous Republic, created by the body (institution) determined by the relevant executive power body, based on the confirmation document of the body (institution) determined by the relevant executive power body, as well as raw materials and materials, will be subject to VAT for a period of 10 years from January 1, 2026.
According to the amendment to the law, the import and sale of electric buses are exempted from VAT. Thus, according to the confirmation document issued by the body (institution) determined by the relevant executive power body, the import of electric-powered buses without seats, handles and monitors by residents of industrial parks for the purpose of industrial production (assembly) and the sale of those buses imported by residents of industrial parks with seats, handles and monitors installed will be exempted from VAT for a period of one year from January 1, 2026. It should be noted that until today, only the import and sale of cars with an electric motor were exempt from VAT.
Let’s add that the value added tax (VAT) concession applied to the import and sale of hybrid and electric passenger cars expired on January 1.
Another change to the legislation is related to natural persons engaged in public catering activities.
Thus, according to Article 174.5 of the Tax Code, when calculating VAT to the state budget by natural persons engaged in public catering activities for a period of three years from January 1, 2026, the income obtained from the reduction of the VAT amount will be exempted from income (profit) tax. The mentioned article states that 50 percent of the turnover of medical institutions and individuals engaged in private medical practice during the reporting period, formed on the basis of cashless payments made through POS-terminal for medical services provided to the population, is deducted from its taxable total turnover for a period of three years from January 1, 2024. Non-cash payments must be made through a POS-terminal integrated into the control-cash register in a single operating system.
According to another change, the period of exemption from income (profit) tax of media subjects from their activities has been increased.
Thus, the income of media subjects (except for audiovisual media subjects) from their activities (including advertising income), as well as financial assistance provided by the body (institution) determined by the relevant executive power body, will be exempted from income tax until January 1, 2029.
Also, the presentation of media products produced by media entities (except for audiovisual media entities), as well as the performance of works and services directly related to media activities to media entities (except for audiovisual media entities) by non-residents who do not have permanent representation in Azerbaijan, will be exempted from VAT until January 1, 2029.
Prior to the change, the exemptions were applicable from January 1, 2023 and would expire on January 1, 2026.
In addition, the import of equipment and materials will be exempted from VAT until January 1, 2029 within the framework of reconstruction projects of large oil refineries (annual processing capacity of not less than three million tons of crude oil) based on the confirmation document of the body (institution) determined by the relevant executive authority.
The period of exemption from VAT for the import of equipment and materials within the framework of the reconstruction and modernization project of the Heydar Aliyev Oil Refinery project, for the purpose of reducing the financial costs, directing the involved funds to direct investment, and the production of gasoline and diesel according to EURO-5 standards, has been extended for another three years.
The said concessions were applied from January 1, 2021 and would expire on January 1, 2026.
According to another change, the presentation of non-performing (toxic) assets as determined by the relevant executive authority as part of the resolution and rehabilitation of insolvent banks, as well as the presentation of bank assets within the bankruptcy procedure, will be exempt from VAT until January 1, 2031.
These concessions were applied from January 1, 2017 and would expire on January 1, 2026.
Also, the excise rates of some tobacco products have been changed.
The excise duty on products containing tobacco or reclaimed tobacco that can be inhaled without lighting is increased from 16 manats to 25.5 manats per 1,000 pieces.
Excise duty on other snuff, chewable or snorted products will increase from 22 manats to 162 manats for local production, and from 30 manats to 170 manats for imports.
In addition, certain changes have been made to the Law “On Social Insurance”, some of these provisions will enter into force on the first day of the year.
Thus, the procedure for deducting the mandatory state social insurance fee for insured persons who receive income from activities that are not related to salaried work has been changed. According to the current legislation, the mandatory state social insurance fee is paid at the following rates for insured persons who receive income from activities not related to wage employment:
– 50 percent of the minimum monthly salary in the construction sector, 25 percent in other fields, 100 percent in Baku city, 90 percent in Sumgait and Ganja cities, 80 percent in other cities, 60 percent in administrative territorial units and settlements that are the administrative center of district administrative territorial units, and 50 percent in rural areas.
According to the amendment, the mandatory state social insurance fee will be paid at the following rates for insured persons who receive income from non-salaried work:
– less than 15 percent of the minimum monthly salary for entrepreneurial activity, but not more than 100 percent, in the amount of 2 percent of their income (without deduction of expenses).
According to the change in the Law “On Customs Tariff”, more precise regulation of exemptions from customs duties and new exemptions are defined.
The new exemptions apply to:
– import of truck spare parts (for 7 years from January 1, 2026) for the purpose of production by legal entities on the basis of the relevant confirmation document.
– the import of raw materials and materials for the purpose of production, scientific research and experimental design works by legal entities and individual entrepreneurs who are residents of industrial or technology parks located in the territory of the Nakhchivan Autonomous Republic and are residents of industrial or technological parks located in the territory of the Nakhchivan Autonomous Republic will be exempted from customs duties for the purpose of carrying out production, scientific research and experimental design work on the basis of the confirmation document of the relevant executive authority body (institution);
– the import of raw materials and materials for the purpose of providing production and services (doing work) by legal entities and individual entrepreneurs who are residents of Nakhchivan who have received the investment promotion document will be exempted from customs duties for a period of 10 years from January 1, 2026, based on the confirmation document of the body (institution) determined by the relevant executive power body;
– the import of machinery, technological equipment and facilities, as well as raw materials and materials for the purpose of production by legal entities and individual entrepreneurs who are residents of industrial districts located in the territory of the Nakhchivan Autonomous Republic and are residents of industrial districts located in the territory of the Nakhchivan Autonomous Republic will be exempted from customs duties for the period of 10 years from January 1, 2026, based on the confirmation document of the authority (institution) determined by the relevant executive authority.
In addition, persons affected by informal employment will act as insured persons under compulsory health insurance. In this regard, the Law “On Medical Insurance” has been amended. Those persons will pay insurance premiums for compulsory medical insurance in the amount determined by the body (institution) determined by the relevant executive authority. If the obligation to pay the insurance fee by the mentioned persons arises during the calendar year, the insurance fee for those persons will be calculated by dividing by 12 and multiplying by the number of the following months until the end of the year, including the month in which the obligation arises. If these persons fail to pay the insurance premium, they will pay an additional insurance premium in the amount of 10 percent of the specified insurance premium.
Also, starting from 2026, the minimum living wage for the country has been set at 300 manats, 317 manats for the working population, 245 manats for pensioners, and 260 manats for children. In this regard, the Law “On the minimum living wage in the Republic of Azerbaijan for 2026” was amended accordingly.
In the previous year, these numbers were 285 manats, 305 manats, 232 manats and 246 manats, respectively.
In addition, the limit of the need criterion for 2026 has also been determined.
For the purpose of determining the addressable state social assistance, the limit of the need criterion for 2026 was approved in the amount of 300 manats. Previously, this amount was 285 manats.
In 2025, the Constitutional Law of the Republic of Azerbaijan “On additional guarantees of the right of the Milli Majlis of the Republic of Azerbaijan to resolve the issue of confidence in the Cabinet of Ministers of the Republic of Azerbaijan” was amended. According to the amendment, the reporting time of the Cabinet of Ministers to the Milli Majlis has changed. Thus, the Cabinet of Ministers will report on the activities of the spring session of the Milli Majlis every year until March 31.
One of the laws that will come into force on the first day of the year is about the special executive officer.
According to the law, the special executive officer has the status of a mandatory executive body and will carry out his activities on a professional basis. A special executive officer will not be considered a representative of the state authority. The activity of a special executive officer will not be considered entrepreneurial activity.
In addition, the newly adopted Law “On Gas Supply” entered into force today, with some exceptions, and the Law “On Gas Supply” dated June 30, 1998 was canceled.
According to the amendment to the Code of Administrative Offenses, with the exception of incandescent lamps intended for special use in production processes and products whose main purpose is not lighting, electric incandescent lamps with a power of 25 W and above that can be used for lighting purposes in an alternating current circuit in Azerbaijan, with the confiscation of electric incandescent lamps that are the direct object of an administrative offense, officials will be fined from one thousand to one thousand five hundred manats, and legal entities three thousand manats. will be fined from manat to four thousand manat.
In case of re-commitment of the mentioned offense by the person who received administrative punishment within one year from the date of entry into force of the decision on administrative punishment, the official persons will be fined from 1500 to 2000 manats, legal persons from 4000 to 5000 manats, with the confiscation of the electric incandescent lamps that are the direct object of the administrative offense.
The law entered into force on January 1, 2026 in relation to incandescent lamps with a power of 60 W and above.
In relation to incandescent lamps with power from 25 W (25 W included) to 60 W, it will come into force from July 1, 2026.
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