Starting next year, Azerbaijan will calculate VAT on the resale of cars and apartments based on the trade margin rather than the full value of the property. A tax official shared the news at a parliamentary committee meeting.
Nijat Imanov, head of a general department at the State Tax Service under the Ministry of Economy, said the VAT calculation rules for reselling cars and apartments will change starting next year. Under the new approach, tax will be charged on the trade margin — the difference between the purchase and sale prices — rather than on the full value of the property.
Imanov made the announcement at a meeting of the Milli Majlis’s Committee on Economic Policy, Industry and Entrepreneurship. He said that under the current rules, car dealers who officially buy back vehicles from citizens and then resell them pay 18% VAT, which he said put businesses at a disadvantage.
The change follows complaints from business representatives over the issue. Officials have decided that for cars purchased from individuals via non-cash payment and later resold, VAT will be calculated only on the trade margin — the difference between the purchase and sale prices.
New rule will also cover real estate
Imanov noted that a similar mechanism will apply to people working in construction and to the real estate market more broadly. For legal entities that buy apartments from individuals, as well as construction companies, VAT on resale will likewise be calculated on the difference between the purchase and sale prices.
