Ministry of Taxes of the Republic of Azerbaijan 

ROYALTY (MINING TAX) 

Mining tax 

Royalty shall be paid with a view to rational use of subsurface resources in the territory of the Republic of Azerbaijan and on the Caspian shelf.
Taxpayers
Payers of royalty are the physical entities and enterprises extracting the minerals from subsurface strata of the earth on the territory of the Azerbaijan Republic (including Caspian Sea sector belonging to the Azerbaijan Republic).
Taxable Base
Minerals extracted from subsurface strata in the territory of the Republic of Azerbaijan (including the portion of Caspian Sea belonging to the Republic of Azerbaijan).
Tax rates
 Royalty is established dependent from the type of produced natural resources, with application to wholesale price, as follows:

Name of natural resources subject to royalty	Royalty rates (in percents)
Crude oil	26
Natural gas	20
Mining natural resources: All types of metals	3

Royalty is calculated for each cubic meter dependent on the following types of produced natural resources at following rates:
Wholesale price for the purposes of taxation is considered as actual output (sale) price (not less than market price) determined by the taxpayer for the produced natural resources, but if these prices determined by the state it considered as regulated price.

Royalty is calculated for each cubic meter dependent on the following types of produced natural resources at following rates:

Names of natural resources, subject to royalty tax	Royalty tax rates (in mantas)
Non-metallic natural resources:
Zeolite	0,5
Barite	0,5
Sawn stone	0,5
Rubbles	0,5
Clays for production of light fillers (claydite, nodulizer)	0,5
Bentonite clays	0,5
Brick and tiling clays	0,5
Volcano ash and pamice	0,5
Quartz sands	0,5
Construction sands	0,5
cement stuff (limestone, marl-clay, volcano ash)	0,5
mask stones (marble, gabbro, tufs, travertine, marbled limestone)	1
Precious and half precious jewelry stones	4
Rock salt	4
iodine bromine mixed waters	0.02
Mineral waters	6

Procedure for calculating tax, term for its payment and submission of the tax return

Tax on royalty shall be calculated on minerals crude oil, natural gas and all types of metals with application of the appropriate tax rates (taxable base) to their wholesale price and on other natural resources with application of the appropriate tax rates to each cubic meter of minerals mined from the subsurface of the earth.

The reporting period for the mining tax is calendar month.

Royalties shall be paid after the extraction of a product on a monthly basis on no later than 20th day of the month following the accounting month.

Payers of royalties shall submit tax returns on a monthly basis no later than the 20th day of the month following the accounting month, on the mining tax to the tax authorities, on taxes to be paid to local budgets- to municipalities.

Mining tax shall be considered as deductions not limited by income.

The mining tax (with exception of mining tax on construction materials of local importance) shall be paid to the state budget.

The mining tax on construction materials of the local importance shall be paid to the local (municipal) budget.

Ceramide clays, mortar sand, raw materials from high-strength crushed stone are considered as the construction materials of local importance.

When calculating the mining tax for the production of oil and gas, the volumes of oil and gas re-injected back to well due to the technological processes shall be deducted from the volumes of oil and gas produced in accordance with regulations established by relevant authorities of executive power.

Financial sanctions and interests on overdue payments

The taxpayer and their agents according to the legislation are responsible for the calculation, on time payment and submission of tax returns of mining tax.
On the basis of the decision of the head (deputy) of the tax authority the financial sanction at the value of 40 manats is applied to the taxpayer, who did not submit in timely manner the tax report without valid reasons.
If the taxpayer has reduced the amount of tax specified in the report, in comparison with the amount, which should be specified in the report, as well as if he did not submit the report and evaded from transfer of required amount of tax to the state budget, the financial sanction at the rate of 25 percent of the reduced or evaded tax amounts is applied to such a person.
For failure to pay the tax or current tax payment during the period determined by law, the interest at the rate of 0, 1% of the amount of tax or current tax payment is imposed on the taxpayer or tax agent for each day of delay.