Tax Practice

and Procedures

Chapter 10
EXCISE TAX

Lecturer: Matlab Valiyev

Ch. 4-1

Chapter Goals
After completing this chapter, you will be able
to :

Calculate Excise Tax

Determine the Excisable goods

Determine the Exemption applicable to

excisable goods

Ch. 4-2

Excise Tax
Excise tax is an indirect tax charged on the
production and import of particular goods. An
excise is considered an indirect tax, meaning that
the producer or importer who pays the tax to the
government budget, covers the tax by raising the
price paid by the buyer.
Excise Tax is especially imposed on such goods
which are not included into daily consumer basket.

Ch. 4-3

Excise Tax
Taxpayers of Excise Tax:
All legal entities and physical persons engaged in
the production of excisable goods in Azerbaijan;

All legal entities and physical persons engaged in

the import of such goods into Azerbaijan.

Ch. 4-4

Excise Tax
Taxable Operations
The following operations are subject to excise tax:
The production of excisable goods in the territory
of Azerbaijan;

An import of excisable goods according to the

customs legislation of Azerbaijan

Ch. 4-5

Taxable Base
Taxable base
For oil products produced in Azerbaijan, the
amount of the taxable consideration shall be
determined on the basis of amount not less than
the wholesale market price;
Taxable operation for other goods with excise tax
produced in the territory of the Azerbaijan shall be
considered as the quantity of produced goods.

Ch. 4-6

Taxable Base

With respect to imported goods (with exception

of light vehicles) the amount of the taxable base
shall be the customs value of the goods
determined in accordance with the customs
legislation Azerbaijan;

Taxable base of light vehicles, leisure and sports

yachts and other floating transports is their
engine volumes.

Ch. 4-7

Date of Taxable Operations

Date of Taxable Operations
The date of the taxable operation of goods
produced in Azerbaijan, shall be the date when
the goods are released outside the boundaries of
the production area.
With respect of the taxation of imported of
goods, the time of the taxable operation is the
import date of such goods into Azerbaijan.

Ch. 4-8

Excise Tax Exemptions

The followings shall be exempted from excise:
Import of three liters for personal consumption;
Import of 600 unit cigarettes for personal
consumption;
20 gram gold;
One tank of fuel stipulated by the technical passport of
the vehicle for persons entering into Azerbaijan by
automobiles;
Goods transported through the territory of Azerbaijan
by transit;
Temporary import of goods into Azerbaijan.

Excise Tax
Taxable goods

Alcohol, beer and all types of alcoholic

beverages;
Tobacco products;
Oil products;
Light vehicles;
Leisure and sports yachts as well as other
floating transports stipulated for these
purposes.

Ch. 4-10

Tax rates
The Cabinet of Ministers determines tax rates of
excise tax for excisable goods imported into
Azerbaijan.
Food alcohol (including ethyl alcohol nondenatured with alcohol content of not less than 80
percent; ethyl alcohol non-denatured with alcohol
content of less than 80 percent) - 2 AZN per liter;

Ch. 4-11

Tax rates

Vodka, strong drinks and strong beverage

materials, liqueurs and liqueur products - 2 AZN
per liter;
Cognac and cognac products - 6 AZN per liter;
Sparkling wines 2,5 AZN per liter;
Wine and vineyard materials - 0.1 AZN per liter;
Beer and other beverages containing beer - 0.2
AZN per liter;
All types of tobacco products 4 AZN for 1000
unit.
Ch. 4-12

Tax rates
Description of taxable object

Excise rate

Vehicles:

With engine volume up to 2000

cubic sm.

For each cubic sm. of engine volume- 0.2

manat

With engine volume up to 3000

cubic sm.

400 AZN + 1,5 manat for each cubic sm. for

the portion of engine 2001-3000 cubic sm. of
engine volume

With engine volume up to 4000

cubic sm.

1900 AZN+ 4 AZN for each cubic sm. for the

portion of engine 3001-4000 cubic sm. of the
engine volume

With engine volume up to 5000

cubic sm.

5900 AZN+ 8 AZN for each cubic sm. for the

portion of engine 4001-5000 cubic sm. of the
engine volume

With engine volume above 5000

cubic sm.

13900 AZN + 10 AZN for each cubic sm. for

the portion of engine exceeding 5000 cubic
meters of engine volume

Sport and leisure yachts and other

floating transports

Penalties

For sale of excisable goods and delivery of

products outside of production area without
excise labels, the financial sanctions shall apply
to the taxpayer at the amount of 5000 AZN.
For import of excisable goods without excise
labels, the financial sanction in amount of 20003000 AZN shall be applicable to Companies.

Filing and Payment Deadline

Each Excise Tax payer shall be required to

submit Excise Tax return not later than the 20 th
day of the month following the reporting period.

Each Excise Tax payer is responsible to pay

Excise Tax debt not later than the 20th day of the
month following the reporting period. Excise Tax
reporting period is a calendar month.

Ch. 4-15