According to the change, monthly income up to 8000 AZN (1 USD= 1.7 AZN) is fully exempted from income tax, whereas citizens with monthly income over 8000 AZN are subject to income tax at the rate of 14 percent for the amount exceeding 8000 AZN. The aforementioned incentive will remain applicable during 7 years.

For the next 7 years new social insurance contribution rates will be applied in respect of non-oil private sector. Thus, for individuals whose gross taxable monthly income is below 200 AZN– 3% will be withheld from employee and 22% will be paid by employer. For individuals whose gross taxable monthly income is above 200 AZN – 10% of the amount exceeding AZN 200 plus 6 AZN will be withheld from employee and 15% of the amount exceeding 200 AZN plus 44 AZN will be paid by employer. This amendment targets alleviation of fiscal burden of employers related to social insurance contributions.

Consumers of retail sales and catering services are entitled to cashback of 15 percent of VAT paid via cashless transaction and to cashback of 10 percent of VAT paid in cash. For the period of 3 years income (profit) tax rate for entrepreneurs engaged in retail business and catering services will be reduced in the amount of 25% of total share of cashless payments made through POS terminals in gross income (profit).

As part of the measures aimed at supporting entrepreneurship, allocations made by taxpayers to the institutions engaged in the fields of science, education, health, sports and culture in the amount not exceeding 10 percent of taxpayer’s profit have been exempted from tax for the period of 10 years. It is also worth noting that profit of educational institutions (excluding portion of profit paid as dividend) was also exempted from tax.