Netflix and eBay will pay taxes in Azerbaijan

Starting from September 1, a new mechanism for taxing the digital economy will be applied in Azerbaijan. According to amendments made to the Tax Code, if the annual turnover of a foreign e-commerce platform providing electronic services to persons not registered for tax purposes in Azerbaijan exceeds the manat equivalent of 10,000 US dollars, such a company will be required to register for tax purposes electronically within 30 days. This requirement will come into effect in September of this year.

This was reported to BAKU.WS by the State Tax Service.

In preparation for its implementation, the State Tax Service is conducting explanatory work with international platforms providing electronic services in Azerbaijan. Registration of such companies has already begun. Information about them is posted on the official website of the agency.

The new procedure applies only to electronic services provided to persons not registered for tax purposes. In such cases, VAT for digital services will be remitted to the state budget by the foreign company itself.

When using digital services for business purposes, taxpayers must correctly enter their TIN in the foreign platform's system. If the TIN is provided, the company does not include VAT in the cost of the service and does not withhold it. In this case, the taxpayer independently calculates and pays VAT in accordance with the procedure established by law.

The list of services subject to the new rules is defined by legislation. According to the rules approved by Cabinet of Ministers Resolution No. 387 dated October 30, 2023, works and services provided within the framework of electronic commerce include downloading electronic books, music, audio and video materials, graphic images, virtual games and software, placing advertisements on the internet, and other similar services.

In addition, four more international digital service providers have been registered with the tax authorities through the electronic portal of the State Tax Service.

These are the American companies Anthropic, PBC and Aghanim Inc., the Swiss eBay Marketplaces GmbH, and the Dutch Netflix International B.V.

Their registration as VAT payers will come into effect on September 1, 2026.