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LAW OF THE AZERBAIJAN REPUBLIC

of December 9, 2025 No. 297-VIIQD

About modification in the Tax code of the Azerbaijan Republic, the laws of the Azerbaijan Republic "About the status of the deputy Millie of Majlis of the Azerbaijan Republic", "About social insurance", "About the national compulsory personal insurance of the military personnel", "About the national compulsory personal insurance of staff of courts and law enforcement agencies", "About medical insurance", "About public service", "About the state care of persons having diabetes", "About the national compulsory personal insurance of staff of the diplomatic services working in diplomatic representations and consulates of the Azerbaijan Republic", "About the state care of persons having heritable diseases of blood - hemophilia and thalassemia", "About insurance activity", "Compulsory insurance from disability as a result of labor accidents and occupational diseases", "About the state care of persons having multiple sclerosis", "About obligatory medical examination of children", "About customs tariff", "About non-cash calculations" and "About the rights of persons with limited opportunities"

Millie Majlis of the Azerbaijan Republic, being guided by Items 1, of 15, of 16, 25 and 27-1 parts I of article 94 of the Constitution of the Azerbaijan Republic, decides:

Article 1. In the Tax code of the Azerbaijan Republic (The collection of the legislation of the Azerbaijan Republic, 2000, No. 8 (the Book I), Article 583 (Volume I); 2024, No. 2, Article 138, No. 4, article 365, No. 5 (Book I), article 498, No. 6 (Book I), Articles 630, 638, No. 7, Article 747, No. 8, Articles 932, 933, 934, No. 10, Article 1118, No. 11, article 1182, No. 12 (Book I), Article 1282 (Book II), Article 1345; 2025, No. 2, Article 96, No. 3, article 214, No. 4 (Book I), Articles 307, Articles 315, 318, 322, No. 5, Articles 432, 441, No. 6, Articles 524, 536, No. 7, Articles 609, 618, No. 8, Articles 743, 744; The Law of the Azerbaijan Republic No. 277-VIIGD of October 24, 2025) to make the following changes:

1.1. To exclude the words "if other is not provided by this Code" from Article 11;

1.2. Under Article 13:

1.2.1. In Article 13.2.49-2 after the word "inspection" the words "or horizontal monitoring", after the word "inspection" - the word are added "(monitoring)", and also the words "and also the voluntary statement in these cases for the periods preceding the 3-year period specified in Article 85.5 of this Code irrespective of whether exit tax audit was carried out";

1.2.2. To replace semicolon at the end of Article 13.2.60 with point, to add the following second and third offers to this Article:

"Provisions of this Article and Article 13.2.61 of this Code are also applied to fishery (except for productions of fish caviar). The fish products subjected to transactions of cutting and freezing by persons performing fish activities except for of the fish products subjected to conversion transactions are considered equivalent agricultural products for the purposes of of this Code;";

1.2.3. Repeal Article 13.2.68;

1.2.4. After the word "articles" to add the word to Article 13.2.72 "and also article 14.5.1-1.3 of the Law of the Azerbaijan Republic "About social insurance";

1.2.5. In Article 13.2.81 after the word "drawn up" to add the word "performed within the dummy and (or) false transaction";

1.3. Under Article 34:

1.3.1. In the first offer of the eighth paragraph of Article 34.1 the word "in format" shall be replaced with words "in format (except for sendings the statement for registration by the post message)";

1.3.2. Add Article 34.4 with the second paragraph of the following content:

"The physical person who is the taxpayer submits to tax authority the application for removal from registration which form is approved by body (organization) determined by the relevant executive body in electronic form and (or) paper form (except for sendings by mail));

1.3.3. Exclude Article 34.7.4;

1.4. Under Article 36:

1.4.1. after the word "audits" in heading to add the word "horizontal monitoring";

1.4.2. Add with Article 36.6-1 of the following content:

"36.6-1. The tax authority performs horizontal monitoring of activities of the taxpayers allowed to horizontal monitoring, according to the procedure, provided in Article 38-1 of this Code. Mobile (except as specified, provided by Articles 38.3. 2, 38.3.5, 38.3.6 and 38.3.10 of this Code) and internal tax audits are not carried out for the taxpayers allowed to horizontal monitoring during the accounting periods covered by monitoring.

1.5. Under Article 38:

1.5.1. Exclude the words "including electronic audit" from the first paragraph of Article 38.1;

1.5.2. Add Article 38.3.10 of the following content:

"38.3.10. When calculating taxes if the taxpayer allowed to horizontal monitoring received request from competent authorities of foreign states about application of transfer pricing and the relevant information on income gained abroad. In this case extraordinary inspection of mobile taxes can be carried out only according to the transactions falling under request of competent authorities of foreign states or the relevant information on income gained abroad".

1.5.3. Exclude Article 38.8;

1.6. Add with Article 38-1 of the following content:

"Article 38-1. Horizontal control

38-1.1. Horizontal control is exercised according to this Code and other regulatory legal acts adopted on its basis. Subject of horizontal control is control of the correct calculation, complete and timely tax payment according to this Code. Application of transfer pricing and requests of competent authorities of foreign states, and also check of the relevant information on income gained abroad are performed by means of other measures of tax control and do not fall under horizontal control.

38-1.2. The period covered by horizontal monitoring is considered calendar year and covers one calendar year preceding date of its beginning. Horizontal monitoring begins at the moment specified in Article 38-1.7 of this Code and comes to an end not later than in 6 months. In case of need conducting additional check, the term of horizontal monitoring can be extended by the decision of tax authority for a period of up to two months.

38-1.3. Taking into account provisions of Article 38-1.4 of this Code, the taxpayers answering to all to the following conditions date of filing of application about the admission to horizontal monitoring can be allowed to horizontal monitoring:

38-1.3.1. if the taxpayer is average and large business entity;

38-1.3.2. if the taxpayer keeps business and tax accounting with use of the software intended for automation of accounting and (or) tax accounting;

38-1.3.3. if the taxpayer applies internal control system according to requirements of Article 38-1.10.2 of this Code.

38-1.4. If concerning him / her the decision on the risk taxpayer is effective and also if criminal case upon violation of the tax legislation is brought, the taxpayer cannot be allowed to horizontal monitoring.

38-1.5. The taxpayer submitting the application for the admission to horizontal monitoring shall address to tax authority no later than September 1 of the year preceding the period of carrying out horizontal monitoring with the statement, the approved body (organization), in the form and procedure for filling determined by the relevant executive body, and the following documents (information):

38-1.5.1. the documents and information concerning calculation and tax payment according to the administrative provisions approved according to Article 38-1.10.1 of this Code;

38-1.5.2. documents on the internal control system created according to Article 38-1.10.2 of this Code, possible tax risks and procedure for control of these risks.

38-1.6. The tax authority within 2 months considers the application for the admission to horizontal monitoring and the documents attached to it on compliance to the conditions established in Article 38-1.3 of this Code and by results of consideration makes the motivated decision on the admission of the taxpayer to horizontal monitoring or on refusal in the admission. The decision on the admission of the taxpayer to horizontal monitoring is made once and remains in force in the years ahead (if the taxpayer is not excluded from horizontal monitoring according to Article 38-1.12 of this Code).

38-1.7. The taxpayer on whom the decision on the admission to horizontal monitoring is made shall submit to tax authority the documents and information necessary for monitoring, within 30 days from the moment of the expiration of submission of the declaration on the income tax and the income (taking into account prolongation of the accounting period) to the terms provided by this Code. The tax authority makes the decision on the beginning of horizontal monitoring next day after the expiration provided by this Article.

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