Azerbaijan

Individual - Other taxes

Last reviewed - 11 February 2020

Social security contributions

From 1 January 2019, the mandatory social security contribution rates for employment income (other than oil and gas and government sectors) are as follows for a seven-year period:

Amount of income Social contribution per employee Social contribution per employer
Up to AZN 200 3% 2%
Above AZN 200 AZN 6 + 10% for the amount above AZN 200 AZN 44 + 15% for the amount above AZN 200

The standard rates that are applicable to the employees of the oil and gas and government sectors, and which will be applied after the seven-year grace period, are as follows:

  • Employee: 3%
  • Employer: 22%

All foreign employees are subject to social security contributions at these rates, except persons with diplomatic status and expatriate employees working under PSAs.

Entrepreneurs who are physical persons are liable to social security contributions at rates that vary depending on the type of activities and region of operation of such entrepreneurs.

Unemployment insurance contributions (UIC)

Starting from 1 January 2018, the law 'On Unemployment' has been enacted as a result of which each employer and employee will bear 0.5% UIC assessed on the gross monthly salary.

The amount of unemployment insurance payments depends on the length of insurance record and the amount of past average monthly salary.

Mandatory medical insurance

According to the Law of the Republic of Azerbaijan "On medical insurance", the introduction of mandatory medical insurance came into force from January 1, 2020.

The calculation and payment of mandatory medical insurance will be effective from April 2020 and determined as follows:

Amount of income Social contribution per employee Social contribution per employer
Up to AZN 8000 2% 2%
Above AZN 8000 AZN 160 + 0.5% for the amount above AZN 8000 AZN 160 + 0.5% for the amount above AZN 8000

From April 1, 2020 - January 1, 2021, a 50% discount will be applied to the non-state and non-oil sector, and mandatory medical insurance will be paid by the employee and the employer in the amount of 1% for the income earned up to AZN 8,000.

Consumption taxes

Value-added tax (VAT)

The standard rate of VAT is 18%. See the Other taxes section in the Corporate tax summary for more information.