From 1 January, employees working in Azerbaijan’s non-oil-and-gas and non-state sectors will begin paying income tax under a new system, following the expiry of a long-running tax concession first introduced in 2019, APA reports.
The change is set out in amendments to the Tax Code approved by President Ilham Aliyev.
Under the revised rules, from 2026 workers earning up to 2,500 manats a month will pay income tax at a rate of 3%. The rate for the same income bracket will rise to 5% in 2027 and 7% from 2028.
Those earning between 2,500 and 8,000 manats a month will pay 75 manats plus 10% of the portion of income above 2,500 manats in 2026. The fixed component will increase to 125 manats in 2027 and 175 manats from 2028, with the 10% rate on the remaining income unchanged.
For monthly earnings above 8,000 manats, the tax will be 625 manats plus 14% of income exceeding that threshold in 2026. The fixed element rises to 675 manats in 2027 and 725 manats from 2028, while the 14% marginal rate remains the same.
Since January 2019, employees in the non-oil-and-gas and non-state sectors have benefited from a seven-year incentive under which income up to 8,000 manats a month was exempt from tax, while earnings above that level were taxed at 14%. That concession expired at the start of 2026.
