The Tax Code of the Republic of Azerbaijan

Chapter IX. Profit tax from legal persons
Article 103. Taxpayers
103.1. Resident and non-resident enterprises in the Republic of Azerbaijan shall be payers of profit tax.
103.2. Any foreign person who is not a physical person shall be treated as an enterprise for the purposes of this Article, unless it proves that it should be treated as a joint ownership pursuant to Article 137 of this Code.
103.3. Provisions of Articles 103.1 and 103.2 of this Code shall not be applied for the purposes of Article 13.2.39.3. of this Code.
Article 104. Taxable Base
104.1. The profit of a resident-enterprise shall be a taxable base. Profit shall be defined as difference between all incomes of a taxpayer (except for the income that is exempt from tax) and expenses (deductions) stipulated in Chapter X of this Code from the income.
104.2. A non-resident enterprise operating in the Republic of Azerbaijan through its permanent establishment shall pay tax on its profit, i.e. on gross income generated from Azeri sources in relationship with the permanent establishment less the amount of expenses incurred with respect to such income as outlined in this Code.
104.3. The gross income of a non-resident enterprise not connected with the permanent establishment shall, if so provided in Article 125 of this Code, be taxed at the source of payment without expenses being deducted.
104.4. A non-resident enterprise generating income through the transfer of property not connected with the permanent establishment shall pay tax on said gross income received during a calendar year from an Azerbaijani source. Said tax shall be paid after the deducting the expenses as outlined in this Code and which relate to such income.
104.5.Gainarisingfrom the revaluationof fixed assets(funds) (positive difference arisingfrom the revaluation) is not the object of taxationof income tax.
Article 105. Tax Rates
105.1. An enterprise’s profit shall be taxed at the rate of 20 percent.
105.2. The gross income (with deduction of VAT and excises) of non-resident, not connected with the activity of his permanent establishments but received from Azerbaijani source shall be taxed at the rates stipulated in Article 125 of this Code.