A draft amendment to Azerbaijan’s Tax Code would classify smartwatches as mobile devices, subjecting each unit to a 20-manat excise tax. The change aims to clarify the definition of “mobile device” after complaints over smart gas meters being taxed.
A new draft amendment to Azerbaijan’s Tax Code is set to clarify the rules around excise tax on mobile devices, including smartwatches. Under the current rule, which took effect on January 1, 2026, mobile devices were added to the list of excisable goods, with a payment of 20 manats set for each device. The rule also allows individuals to bring one mobile device per year into the country for personal use without customs payments.
After the law came into force, a number of appeals said that some technical equipment without any individual communication function was also being hit with excise tax when passing through customs, creating serious obstacles.
The problem has mostly surfaced around smart gas meters brought in as part of the country’s utility network modernization work. The pressure and temperature sensors installed in these meters, as well as the communication modules used for data transmission, became a point of dispute. The presence of a SIM card slot or an IMEI number in these devices led customs authorities to classify them as “mobile devices,” triggering the excise tax requirement.
How the definition of mobile device will be clarified
Under rules approved by Cabinet of Ministers Decision No. 212 of December 28, 2011, the term “mobile device” covers phones and other terminal equipment capable of receiving cellular service from mobile operators’ networks.
Under the draft amendment, the test will no longer be simply whether a device can connect to a network, but what purpose that connection serves. Devices that connect to a network via a SIM card or eSIM to provide voice-call service — including mobile phones, tablet computers and smartwatches — will be classified as mobile devices. The move is designed to keep equipment without voice-communication capability, including smart gas meters, outside the scope of the excise tax.
