As is known, the main directions of changes in the Tax Code for 2023 covers the improvement of tax administration mechanisms, reduction of the financial and tax burden of the population through social benefits, fixed tax costs, as well as investment climate, including lowering the tax burden by promoting local production and protecting the country's position in international rankings, etc.
State Tax Service under the Ministry of Economy presents to the attention of the public in parts some of the main changes envisaged in the legislation and their justification. One of the changes envisaged in the Tax Code is the operation of providing residential premises to tenants by the Azerbaijan Mortgage & Credit Guarantee Fund is exempt from VAT.
By the Decree of the President of the Republic of Azerbaijan dated January 25, 2019, The "Rule of the Mortgage and Credit Guarantee Fund of the Republic of Azerbaijan (IKZF) on renting residential areas with the obligation to sell" was approved. From March 2020, the fund has started purchasing residential areas and transferring them to the tenant's ownership under the specified conditions.
In this regard, taking into account the essence of the Fund's obligation to sell and the rental mechanism and its creation goals and social orientation, it is planned to exempt the transaction from VAT. This can lead to an increase in the monthly payments of citizens, a decrease in the housing availability of the population, and a decrease in the efficiency of the mechanism.
In this regard, the proposed concession will contribute to the further improvement of this mechanism and the provision of access to the residential areas of citizens.
