Azerbaijan Awards Tourism Entities Real Estate Tax Breaks

(MENAFN- Trend News Agency) BAKU, Azerbaijan, December 27. Tourism-related activities have been awarded real estate tax exemptions in Azerbaijan, Trend reports via the State Tax Service under Azerbaijan's Ministry of Economy.

The bill "On Amendments to the Tax Code" and other relevant draft legal acts developed to strengthen tax legislation and administration were adopted in the third reading by Azerbaijan's Milli Majlis (Parliament). As in previous years, the main goal directions of Tax Code amendments are to optimize the tax burden of business entities, stimulate entrepreneurial activity, reduce the tax burden of the population through social tax benefits, and improve measures to combat the "shadow economy." The allocation of real estate tax benefits to tourist subjects (hotels, inns, and sanatoriums) is one of the significant improvements in the direction of reducing the tax burden of business and boosting entrepreneurial activity.

"As it is known, the income of regional tourism is mostly derived from seasonal activities, with the amount of income in this sector dramatically reducing during the rest of the year. The asset value of lodging facilities in the tourism industry is relatively significant. As a result of being a fixed expense, property tax imposes a considerable tax burden on seasonally operating firms," the State Service noted.

Tax incentives are granted to enhance regional tourism and lower fixed tax expenses for tourism firms (hotels, inns, and sanatoriums). To that end, the Tax Code has been amended to provide for a 75 percent reduction in the tax on immovable property used in hotel, inn, and sanatorium activities (except for the period of temporary cessation of entrepreneurial activity in accordance with Article 16.3 of the Tax Code) in Azerbaijani cities and districts other than Baku, Sumgayit, Khirdalan, and Absheron district for a period of three years beginning January 1, 2024. The major goal of the modifications is to promote regional tourism and reduce enterprises' fixed tax bills.

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