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
- E-learning
- Apps
- SaaS or cloud-based software
- Streaming or download software
- Online storage
- Advertising
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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 | |
| Azerbaijan | 12% | Jan 2017 | – | |
| 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 |
| Fiji | 9% | TBC | FJD 300,000 | |
| India | 18% | Jul 2017 | - | |
| Indonesia | 11% | Aug 2020 | IDR600m or 12k customers | |
| Japan | 10% | Oct 2015 | JPY 10 million | |
| Kazakhstan | 12% | Jan 2022 | Nil | |
| Kyrgyzstan | 12% | Jan 2022 | Nil | |
| Laos | 7% | Feb 2022 | LAK 400m | |
| Malaysia | 6% | Jan 2020 | RM500,000 | |
| 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 |
| Palau | 10% | Jan 2023 | $300,000 | |
| Philippines | 12% | Jan 2024 ? | P 3million | |
| Singapore | 7% | Jan 2020 | S$ 100,000 | |
| South Korea | 10% | Jul 2015 | Nil | |
| Taiwan | 5% | May 2017 | NTD 480,000 | |
| Tajikistan | 18% | Jan 2021 | ||
| Thailand | 7% | Sep 2021 | 1.8m Baht | |
| Uzbekistan | 15% | Jan 2020 | Nil | |
| Vietnam | 10% | Dec 2020 | – |
