Azerbaijan is ending full tax exemption for agricultural producers. Under a planned amendment to the Tax Code, 10% of farmers’ income and profit will become taxable starting in 2027.
Agricultural producers in Azerbaijan currently enjoy a complete, 100% exemption from income and profit tax. Under a change being prepared to the Tax Code, that full exemption will be reduced to a 90% tax break, meaning the remaining 10% of farmers’ income will become taxable.
The new mechanism will take effect in 2027 and remain in place until January 2032. This will mark the first time since 2001, when the Tax Code was first adopted, that the agricultural sector has faced any form of tax liability, even a partial one.
Other sector-specific benefits remain untouched for now. Exemptions covering value-added tax, property tax, the simplified tax regime and income derived from state subsidies are set to be extended for another five years.
According to Azerbaijan’s Tax Service, producers wishing to benefit from certain exemptions starting next year must register with the Electronic Agriculture Information System (EKTIS) and declare their relevant income in their tax returns.
