Ministry of Taxes of the Republic of Azerbaijan 

TAX ON LAND 

The payers of tax on land are the physical persons and enterprises who own or use land plots on the territory of Azerbaijan Republic. Tax owners and users are liable to tax irrespective of the results of economic activity.

Taxable base

Taxable base is land plots on the territory of the Republic of Azerbaijan owned or used by enterprises and physical persons.
The land tax is determined based on the documents that confirm the right of ownership and use of land plots. Lands with located structures and facilities as well as plots necessary for sanitary protection of facilities are taxed.

Tax rates

Tax rates for agricultural lands are established based on conventional points for each hectare of such lands with consideration of the purpose, geographical location and the quality of lands. The price of one conventional point is 0.06 manats.
Tax on lands designated for industrial, construction, transportation, communication, commercial-consumer and other special purposes, homestead lands, housing resources, and lands occupied by the citizens for cottages is imposed on each 100 square meters of land plot at the rates determined in multiples of conventional financial unit specified in the following table:

Procedure for calculation and payment of the tax on land

Once payers of tax on land obtain the documents confirming the right of ownership and use of lands they must go through registration. Physical persons and municipal enterprises must register at municipalities, while other enterprises register at tax authorities within 1 month.
Enterprises must annually calculate tax on land based on the size of the land spots and the tax rates, and submit such tax returns to tax authorities not later than May 15 of each year.
Municipalities calculate tax on land on physical persons annually before July 1 and submit the payment notifications not later than August 1.
The tax for land plots under buildings owned by the number of legal entities or physical persons is calculated proportional to areas of structure owned by such parties.
Tax on land is paid in equal portions before August 15 and November 15. If the land tax was not paid by previous owner of the land, it must be paid by the new owner of land plot by the date established by legislation.
Enterprises pay the tax on land to the state budget and physical persons to the local (municipal) budget.
Rent is a payment made by a tenant to the landlord for the right to use the land for certain period of time.
Tax on land is included in the rent in case the landlord is a payer of tax on land. If, however, the landlord is not a payer of a tax on land, the rent shall not include the tax on land.

Tax reliefs

Following lands are exempt from tax on land:

• commonly used lands belonging to populated areas;
• lands owned or used by government authorities and local management authorities, budget funded organizations, National Bank of the Republic of Azerbaijan and its structures and also the State Oil Fund of the Republic of Azerbaijan;
• lands pertaining to the State, forest and water reserves which is not attracted to economic activity, as well as land located under the Azerbaijani sector of the Caspian Sea;
• state border lines and lands designated for defense purposes.

The amount of tax on lands owned by following physical persons are reduced by 10 manats:

• National Heroes of the Azerbaijan Republic;
• Heroes of the Soviet Union and Social Labor;
• persons awarded with all three degrees of the Honorary Order;
• disabled people of disability groups I and II;
• widowed wives (husbands) of war participants who were killed at war or died later;
• persons who were awarded orders and medals for heroic labor in the home front during the years of 1941-1945.
• persons who received the status of war veterans;
• persons who acquired radiation sickness or had these diseases as a result of radiation at Chernobyl AES and civil or military atomic facilities.

Financial sanctions

Land owners are liable for accurate calculation of the tax on land and its timely payment to the budget.
A financial sanction is imposed on a taxpayer for late submission of tax return without valid reasons based on the decision of the head (deputy) of the tax authority at the value of 40 manats.
In case the amount of tax indicated on tax report is less than the amount to be indicated on the report and if taxpayer fails to submit tax report and evades to pay the required tax amount to the budget, the financial sanction shall be imposed on the taxpayer at the rate of 25 percent of understated or evaded tax amount.
For failure to pay the tax within the specified period, the interest at the rate of 0,1% of outstanding tax amount shall be imposed on the taxpayer for each day of delay.