On June 21, 2021 an amendment was made to the Tax Code of
Azerbaijan (“Amendment Law”).
Under the Amendment Law, auction organizers are obliged to
withhold simplified tax from mortgagee when the mortgagee receives
the property of an individual (who is not registered with tax
authority), which acts as collateral for a loan facility. If,
however, the property of an individual entrepreneur (who is
registered with tax authority) acts as collateral for a loan
facility, then the individual entrepreneur is obliged to calculate
the simplified tax and remit it to the state budget when the
collateral is received by mortgagee. In other words, auction
organizers are exempted from obligation to calculate taxes and
remit it to the state budget when the mortgagor is an individual
taxpayer.
