The Azerbaijan Ministry of Economy State Tax Service introduced Value Added Tax liabilities on non-resident providers of digital services to consumers on 1 January 2017. Currently, there is not an obligation to VAT register as the government has opted to use a VAT Withholding Tax.
In November 2022, the parliament accepted a Bill to impose VAT registration requirements on non-residents. This has not yet progressed (at April 2023).
Payment providers Withholding VAT
Azerbaijan has imposed a Withholding VAT on individuals’ payments of the tax element of payments made to non-resident providers.
The current VAT rate in Azerbaijan is 18%, and must be split from the payment via payment providers. This includes credit card merchants, banks, payment e-wallets and others. This excludes payments for hotels and aeroplane bookings.
What e-services are liable to VAT in Azerbaijan?
Income from the following services is liable to VAT at 18%
- Telecoms data and voice
- TV and radio broadcasting
- Gaming and games of chance
- SaaS or cloud-based software
- Streaming or download software
- Online storage
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Asia Pacific VAT on digital services
|Comments (click for details)||Rate||Date||Threshold||Comments|
|Australia||10%||Jul 2017||AUD $75,000|
|Armenia||20%||Jan 2022||AMD 115million|
|Bangladesh||5% - 15%||Jul 2019||–||B2B and B2C|
|Bhutan||7%||Jul 2021||Nu 5million|
|Cambodia||10%||Mar 2022||KHR 250m|
|China||6%-13%||N/a||Nil||Withholding VAT; B2B and B2C|
|Indonesia||11%||Aug 2020||IDR600m or 12k customers|
|Japan||10%||Oct 2015||JPY 10 million|
|Laos||7%||Feb 2022||LAK 400m|
|Nepal||13%||Jul 2022||Rupees 2m||Also 2% DST|
|New Zealand||15%||Oct 2016||NZD 60,000|
|Pakistan||2%||Sep 2021||Nil||Marketplace Withholding VAT|
|Philippines||12%||Jan 2024 ?||P 3million|
|Singapore||7%||Jan 2020||S$ 100,000|
|South Korea||10%||Jul 2015||Nil|
|Taiwan||5%||May 2017||NTD 480,000|
|Thailand||7%||Sep 2021||1.8m Baht|