New tax and customs benefits are planned for startup and technology park residents in Azerbaijan, Head of the Legal Department of the Innovation and Digital Development Agency (IDDA), Sabina Humbatzade, said during her speech on the topic "Development of the digital and innovation ecosystem in Azerbaijan: new legislative opportunities" organized within the framework of the educational session "Digital skills for the media", Trend's correspondent reports from the event. According to her, individuals and legal entities operating in certain areas, including individual entrepreneurs, will be exempted from income and profit taxes, as well as dividends. "The main condition for the application of these exemptions is that when products are exported and sold abroad, payments must be made through bank and payment accounts in Azerbaijan," Humbatzade noted.
She pointed out that tax breaks are also provided for property and land used by entities operating in the relevant areas. The department chief also said that changes are also being made to the legislation regarding the duration of tax audits. "In practice, one of the main difficulties we observe when talking to residents and startups is related to the duration of mobile tax audits.
In most cases, residents of the technology park and startups are micro, small, and medium-sized businesses. The fact that mobile tax audits last for months has a negative impact on their activities," she emphasized. According to Humbatzade, with the new changes, the duration of mobile tax inspections of technology park residents and startups cannot exceed 90 business days.
She added that concessions are also envisaged regarding the freezing of funds in the bank accounts of startups and technology park residents with tax debts. "If their tax debt is up to 50,000 manat ($29,410), then the freezing of bank accounts will not be applied. The goal is to enable these entities to continue and develop their businesses by using the funds in their accounts effectively," the official explained.
Humbatzade also spoke about changes related to scientific research and technological projects. "When startups, technology park residents, and scientific institutions are ordered to form an innovative product, the expenses incurred in this direction are multiplied by a factor of 1.5 and included in the object of taxation," he noted. According to him, the fact that a research and development (R&D) project results in technological failure won't prevent the costs incurred from being considered justified.
"Even if an R&D project fails technologically, it is considered a justified cost from a tax perspective," Humbatzade stressed. She further noted that concessions are also envisaged in the field of technology transfer. "Fifty percent of the income from the sale or use of proprietary intangible assets, including software and know-how, is exempt from tax," the head of the department said.
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