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Nov 5, 2026 1 min read

Azerbaijan: Changes in Income Tax rates – 1st January 2027

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Azerbaijan has legislated a scheduled increase in personal income tax on non-oil private-sector wages, effective 1st January 2027. It was adopted by the Milli Majlis (parliament) on 9th December 2025 and enacted as Law No. 297-VIIQD, promulgated by Presidential Decree No. 563 of 29th December 2025, which rewrote Tax Code Article 101.1-1 into a phased 2026–2028 schedule. The 200 manat (AZN) monthly exemption for income up to 2,500 is retained.

The 2026 versus 2027 comparison is set out below:

Item 2026 2027 Change
Income tax – income up to 2,500 3% 5% Rate up
Income tax – 2,500–8,000 75 + 10% over 2,500 125 + 10% over 2,500 Fixed amount +50
Income tax – over 8,000 625 + 14% over 8,000 675 + 14% over 8,000 Fixed amount +50
200 exemption (income ≤ 2,500) Applies Applies No change

Payroll impact

Higher income-tax withholding for every non-oil private-sector employee from the January 2027 pay run. Social security contribution rates are unchanged.

Official sources: taxes.gov.az/uploads/2026/faq/FAQ2026.pdf

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Azerbaijan - Changes in Income Tax rates - 1st January 2027
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