1 January 2026 VAT non-resident providers of e-services replaces Withholding Tax
From 1 January 2026, non-resident providers of digital services to Azerbaijani consumers will be mandated to register with the tax administration and levy 18% VAT. Currently, there is a voluntary VAT regime – where no registration is undertaken, a Withholding Tax applies.
The Azerbaijan Ministry of Economy State Tax Service will issue full legislative amendments and guidance in the forthcoming months.
New VAT registration portal
In June 2024, the tax authorities launched a VAT registration portal wishing to provide a VAT inclusive services.
In November 2022, the parliament accepted a Bill to impose VAT registration requirements on non-residents. This has not yet progressed . The government in December 2023 issued technical implementation regulations. This includes no VAT registration threshold.
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-books
- 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 $75,000 | |
Azerbaijan | 12% | Jan 2017 | – | |
Armenia | 20% | Jan 2022 | AMD 115million | |
Bangladesh | 5% - 15% | Jul 2019 | – | B2B and B2C |
Bhutan | 7% | Jul 2021 | Nu 5million | |
Cambodia | 10% | Mar 2022 | KHR 250m | |
China | 6%-13% | N/a | Nil | Withholding VAT; B2B and B2C |
Cook Island | 15% | 2019 | NZ$ 40,000 | |
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 | |
Kiribati | 12.5% | 2017 | AU$ 100,000 | |
Kyrgyzstan | 12% | Jan 2022 | Nil | |
Laos | 10% | Feb 2022 | LAK 400m | |
Malaysia | 8% | Jan 2020 | RM500,000 | |
Nepal | 13% | Jul 2022 | Rupees 2m | Also 2% DST |
New Caledonia | 11% | 2020 | XPF 7.5 million | |
New Zealand | 15% | Oct 2016 | NZD 60,000 | |
Pakistan | 2% | Sep 2021 | Nil | Marketplace Withholding VAT |
Palau | 10% | Jan 2023 | $300,000 | |
Philippines | 12% | 1 Jun 2025 | P 3million | |
Singapore | 9% | Jan 2020 | S$ 100,000 | |
South Korea | 10% | Jul 2015 | Nil | |
Sri Lanka | 18% | Oct 2025 | LKR 60m | |
Taiwan | 5% | May 2017 | NTD 600,000 | |
Tajikistan | 14% | Jan 2021 | ||
Thailand | 7% | Sep 2021 | 1.8m Baht | |
Uzbekistan | 12% | Jan 2020 | Nil | |
Vietnam | 10% | Dec 2020 | – |