Customs

State policy and regulatory framework

The Constitution of the Republic of Azerbaijan states that every person shall have the duty to pay taxes and other State duties in a timely manner and in the full amount as prescribed by law. To follow the requirements of the Constitution in the field of customs, multiple laws and by-laws have been adopted by the government. The following legislative acts are the core documents regulating customs activity: 

  1. Customs Code
  2. Tax Code   
  3. Law No 687-IVQ "On customs tariffs”adopted on June 13, 2013
  4. Law No 176-VQ "On licenses and permissions”, adopted on March 15, 2016
  5. Decision of the Cabinet of Ministers of the Republic of Azerbaijan No 263 on adoption of “Rules of declaration of goods and transportation facilities being crossed through the customs border”adopted on July 22, 2014
  6. Decision of the Cabinet of Ministers of the Republic of Azerbaijan No 500 on adoption of “Goods’ nomenclature of foreign economic activity, import and export duties’ rates of the Republic of Azerbaijan”, adopted on November 17, 2017 
  7. Decree of the president of the Republic of Azerbaijan No 1654 on adoption of “List of raw materials and goods exempted from VAT payment during importation”adopted on November 2, 2017
  8. Decision of the Cabinet of Ministers of the Republic of Azerbaijan No 20 "On doption of excise rates for goods imported to the Republic of Azerbaijan subject to excise duties”adopted on January 19, 2001
  9. Decision of the Cabinet of Ministers No 168 on adoption of “Amounts of customs fees and charges”, adopted on April 26, 2016 

 

The following legislation exists to prevent violation of legislation in the field of customs:

  1. Criminal Code
  2. Code on Administrative Infringements

 

Customs procedures

Issuance for free circulation - the foreign commodities designed for sale, use or consumption in domestic market shall be placed under issuance for free circulation customs procedure. Issuance for free circulation customs procedure covers the following: 

  • Payment of all charges with respect to commodities envisaged by legislation
  • Application of trade policy measures 
  • Completion of all other procedures envisaged for importation of commodities

 

Re-import - is a procedure where exported commodities are returned to the country within three (3) years from the date of their exporting in the same form while exporting, i.e. returned fully or partially to the customs territory without any processing in the foreign country. No customs duties and taxes or any other measures of trade policy shall apply to such commodities and these commodities shall be placed under issuance for free circulation customs procedure.

 

Temporary import - Foreign commodities designed for re-export shall be placed under temporary import procedures. Following the requirement prescribed in the Article 194 of the Customs Code, such commodities may be used in the customs territory exempted fully or partially from payment of customs duties and taxes and without application of any trade policy measures. In case of full exemption from payment of customs duties, such commodities are also exempted from value added tax ("VAT") and excise taxes. 

 

International transit - is a special customs procedure by which foreign commodities are carried from one point to another point under customs control without payment of any customs duties, VAT or excise and without application of any trade policy measures.  

 

Temporary storage - excluding the case where commodities declared to be placed under another customs procedures, the following foreign goods presented to the customs authority by the owner of such commodities may be declared to be placed under the temporary storage special customs procedure:  

  • Commodities brought to the customs territory, excluding the case of direct import to the free zones 
  • Commodities carried out of the free zones to the other part of customs territory 
  • Commodities over which the international transit special customs procedure was completed

 

Storage in the customs warehouse - foreign commodities can be declared for storage in the customs warehouse special customs procedure only by persons having licensed by related executive power authority and be placed into and stored at the customs warehouses under supervision of customs authorities. The commodities placed under the customs warehouse special customs procedure may be temporary carried out of the customs warehouses. Except cases of force majeure, to move the commodities out of the customs warehouses, a permission from the customs authorities is required.

 

Free zone - commodities brought to the free zones shall be presented to the customs authorities and pass customs clearance in the following cases:

  • If the commodities brought directly to the free zones out of the customs territory 
  • If the commodities over which another special customs procedures completed are being placed under free zone special customs procedure 
  • If the commodities are being placed under free zone special customs procedure in order to implement the decision that gives a rise to reimburse paid customs duties or exclude those commodities from payment of duties

 

Final use - the commodities declared to be placed under final use special customs procedures shall be released for free circulation being exempted from all duties and taxes in accordance with the goals of this procedure. In such cases, the commodities shall remain under customs supervision. The customs supervision over the commodities placed under final use special customs procedures is considered to be completed in the following cases: 

  • If the commodities are being used for the purposes prescribed by the legislation that gives rise to exempt them from customs duties and taxes 
  • In case of exportation or liquidation of these commodities or in case of refusal of such commodities in favour of the State 
  • If the commodities are being used for purposes other than those that gave rise for exemption of them from payment of customs duties and taxes and all the duties and taxes paid with regard to that fact 
  • If the commodities are being sold in the customs territory and under the customs supervision at duty-free shops established in the places (international airports and sea ports or other places) and the manner prescribed by the relevant authority of executive power, without withdrawal of any customs duties and taxes and without application of any trade policy measures

 

Domestic processing - foreign commodities may be used in one or several processing procedure without application of the following: 

  • Import customs duties 
  • VAT and excise duties prescribed by the legislation for the importation of goods 
  • Trade policy measures 

 

Excluding the cases of liquidation and refitting of commodities, the procedures of domestic processing can be used only in case where possibilities of unification of the commodities placed under domestic processing procedure and processed commodities are exist despite the fact of usage of production materials. The period for completion of domestic processing procedures shall not exceed two (2) years.

 

Export - domestically produced commodities which are carried outside of the customs territory without obligations on their return shall be placed under export customs procedures. This procedure shall not be applied to the following commodities: 

  • Placed under special customs procedures of final use or processing abroad
  • Under domestic transit or to the commodities temporary exported abroad following the Article 130 of the Customs Code 

 

Re-export - in case of exportation of foreign commodities outside of the customs territory, the person executing this operation shall give a notice to the customs authority for customs clearance of such action. The procedure shall not be applied to the following commodities:

  • Declared under international transit special customs procedures
  • Reloaded from one transportation facility to another transportation facility within free zone or commodities re-exported directly from free zone
  • That were placed under temporary storage special customs procedures and re-exported directly from warehouses for temporary storage

 

​​The commodities issued for free circulation can be re-exported from the customs territory. The customs duties and taxes paid for the importation of such commodities shall be reimbursed if the re-exported commodity meets the requirements of related authority of executive power and have been under free circulation within one (1) year.   

 

Temporary export - Domestically produced commodities designed for re-import shall be placed under temporary export customs procedure. According the Article 130.2 of the Customs Code, such commodities shall be fully or partially exempted from customs duties and taxes as well as from measures of trade policy and shall be used outside of the customs territory.    

 

Find more information on customs procedures at the following link: www.e-qanun.az/code/21

 

Customs clearance and customs fees 

According the rules approved by the Decision of the Cabinet of Ministers of the Republic of Azerbaijan No 263 by July 22, 2014, documents for customs clearance may be filled to the customs authorities in writing or electronic form. Find more information on documents to be submitted to the customs authorities along with customs declaration at the following link: www.e-qanun.az/framework/28199 

 

Customs fees are being applied to the commodities during entrance to the customs territory of the Republic of Azerbaijan for the customs services (clearance).  According to Decision No 168 of the Cabinet of Ministers of the Republic of Azerbaijan, the amount of such fees varies from AZN 15-1000 depending on the value of commodity.  Find more information on fees for customs clearance at the following link: www.e-qanun.az/framework/32656

 

Customs duties and rules of origin 

According to the Decision of the Cabinet of Ministers of the Republic of Azerbaijan No 500 "On adoption of goods’ nomenclature of foreign economic activity, import and export duties’ rates of the Republic of Azerbaijan” of November 17, 2017, the import customs duties’ rates for goods imported to the Republic of Azerbaijan is 0%, 5% or 15%. Find more information on customs duties’ rates at the following link: www.e-qanun.az/framework/37035 

 

The commodities originating in countries with which Azerbaijan has signed bilateral free trade agreements are exempted from payment of customs duties when imported into the customs territory of the Republic of Azerbaijan: 

  • Russia
  • Kazakhstan
  • Georgia
  • Ukraine 
  • Belarus
  • Moldova 
  • Uzbekistan
  • Kyrgyz Republic
  • Tajikistan

 

Following the rules of origin, along with the commodities fully originating from the above-mentioned countries, the commodities produced in other countries but sufficiently processed in the listed countries are also considered as a commodities originating from the above-listed countries. The country of origin determination is performed in accordance with the “Rules for determining preferential and non-preferential origin of goods” adopted by the Decision of Cabinet of Ministers of the Republic of Azerbaijan No 3 of January 14, 2014. Find more information on rules of origin at the following link: www.e-qanun.az/framework/26853

 

Value Added Tax

All the commodities imported into the Republic of Azerbaijan, excluding commodities prescribed in the Article 164 of the Tax Code and in the Decree of the President of the Republic of Azerbaijan No 1654 "On the list of raw materials and goods exempted from VAT during importation” of November 2, 2017, are subject to 18% Value Added Tax. Find more information on the list of commodities exempted from VAT at the following links: 

 

Excise Tax

According the Article 190 of the Tax Code and the Decision of the Cabinet of Ministers of the Republic of Azerbaijan No 574 of December 21, 2017, certain commodities are subject to excise tax when imported into the Republic of Azerbaijan. Find more information on the list of commodities subject to the excise taxes and excise rates at the following links: 

 

Licenses and permissions

Licenses 

According to the Law of the Republic of Azerbaijan No 176-VQ “On licenses and permissions” of March 15, 2016, a license is required for the importation into the Republic of Azerbaijan of the following commodities: 

  • Precursors – AZN 250
  • Plant protection facilities and agrochemical substances – AZN 500

 

Find more information on licenses at the following links: 

 

Permissions

According the Law of the Republic of Azerbaijan No 565-IIQ  “On the list of commodities circulation of which require a special permission (restricted civil circulation)” of December 23, 2003 and the “Rules of regulation of export-import activity” adopted by the Decree of the President of the Republic of Azerbaijan No 609 of June 24, 1997,  import of certain commodities into the Republic of Azerbaijan is permitted only by Order of the Cabinet of Ministers of the Republic of Azerbaijan or notice of related government authority. Find the list of these commodities at the following links: 

 

Customs valuation

Customs valuation of commodities imported to the territory of the Republic of Azerbaijan conducted in accordance with the Law No 687-IVQ on “Customs tariffs” of June 13, 2013 through the following methods:    

  • Transaction value of goods 
  • Transaction value of identical goods
  • Transaction value of similar goods
  • Deductive method
  • Computed method 
  • Fall-back method

 

Find more information on customs valuation at the following link: www.e-qanun.az/framework/26154

 

Executive authorities and their competences

Starting from January 1, 2009, all the procedures with regard to customs clearance are being conducted by the State Customs Committee on the basis of “Single window” principle. In addition, according to the Decree of the President of the Republic of Azerbaijan “On actions to improve supervision system over import-export operation” of April 20, 2018, supervision over import-export operations with certain goods shall be conducted mutually by the State Customs Committee and Ministry of Taxes.   

 

The Ministry of Economy is responsible for issuing import licenses. Permission for the importation of goods whose release for free circulation is restricted is issued by the Cabinet of Ministers.  

 

Relevant documents, data and resources

WTO resources