Electric and hybrid cars to be subject to VAT — tax official

Electric and hybrid passenger cars imported into Azerbaijan will be subject to value-added tax (VAT), said Nicat Imanov, head of the Tax Policy Department at the State Tax Service, during parliamentary discussions on proposed amendments to the Tax Code.

According to him, previous VAT exemptions for the import and sale of electric vehicles will be lifted, while the exemption will remain in force only for certain bus models.

At the same time, locally manufactured electric and hybrid cars, as well as the import of their spare parts, will be exempt from VAT.

Imanov noted that the change aims to boost domestic car production and attract additional investment to the country.

“The new tax incentives are designed to stimulate local manufacturing, increase domestic value creation, and strengthen industrial capacity,” he said.

Under the draft law, from 2026, tax benefits for car production will apply only to local manufacturers, while imported vehicles will be subject to VAT.

N.Tabrizli