Republic of Azerbaijan - Profit Tax

February 2006

Source: Ministry of Taxes of the Republic of Azerbaijan

Loss-Carry Forward

Part of enterprise costs exceeding incomes, the deduction of which from incomes is allowed, is carried forward for up to 3 years and compensated by the profit of those years without any limitations.

Foreign tax credit

Amounts of profit tax of resident enterprise paid outside the Republic of Azerbaijan from the incomes of not Azerbaijani source is credited upon the payment of tax in the Republic of Azerbaijan.
Amounts of profit tax paid outside the Republic of Azerbaijan must not exceed the amount of tax charged on that profit in the Republic of Azerbaijan at the rates in effect in the Republic of Azerbaijan.

Procedure for recording income and expenditures

In order to reflect taxable income (or profit) clearly, the taxpayer is obliged to maintain accurate and timely records of income and expenditures on the basis of documented data.
Taxpayer may use cash method or accrual method of tax accounting, provided the same method is applied by taxpayer during the tax year.
Taxpayer using cash method must account for income at the moment that it actually receives such income or such income is transferred to its disposal and for expenses - at the moment that these expenses are actually incurred.
The moment that cash monies are received or the moment that said monies are transferred to taxpayer's bank account in case of non-cash payments is considered the moment of receipt of income and the moment of carrying out expenses is the moment that these expenses are actually incurred.
Taxpayer maintaining records using the accrual method must record income and expenditures on the moment when appropriate liability is created regardless of the moment that the income is received or the expenditures are incurred.
If the term of payment, when paying interest on debt obligation or rent on a leased property, covers few reporting periods, expenses shall be allocated over these reporting periods in accordance with the procedure for their calculation.

<< Prev | Forward >>

Go Back

Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
Please read our terms of service before entering this site.

Homepage | Security Policy | Terms of Service