Baku: 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.
According to Azeri-Press News Agency, 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.