This point is envisaged in Azerbaijani President Ilham Aliyev’s decree on amendments to the "Procedure for refunding value added tax for the goods not intended for production or commercial purposes, acquired by foreigners and stateless people in the territory of the Republic of Azerbaijan".

According to the decree, the Azerbaijani Ministry of Culture and Tourism, the Ministry of Taxes will cooperate along with Azerbaijan Airlines CJSC, Azerbaijan Caspian Shipping Company to promote the use of the Tax Free system in the country.

Azerbaijan Caspian Shipping Company CJSC will also organize educational activities, distribute booklets to the tourists coming to the country.

Another amendment stipulates that at present, the above-mentioned procedure also applies to the goods which are exported by sea. Previously it applied only to air transport.

The air transport, as well as maritime transport crew members, who are performing their duties, will be unable to use the Tax Free system.

The Azerbaijani Cabinet of Ministers has been charged with bringing the normative-legal acts in accordance with the decree, as well as preparing relevant proposals and informing the president during three months.

The Azerbaijani Cabinet of Ministers has been also charged with solving other issues arising from the decree.

The Azerbaijani Ministry of Justice has been charged with bringing the normative-legal acts of the central executive bodies in accordance with the decree and informing the country’s Cabinet of Ministers.

According to the procedure, in order to use the Tax Free system, the price of goods purchased through a single e-invoice must not be less than 300 manat (including VAT).

How does the Tax Free system work in Azerbaijan?

The goods must be exported from the territory of Azerbaijan within 90 days from the date of purchase. After the period expires, the amount of VAT paid for the goods, will not be refunded.

The VAT rate on all goods in Azerbaijan is 18 percent. Regardless of the way of transfer, 20 percent will be deducted from the VAT amount as the payment for service, and the rest sum will be refunded.

While purchasing goods in the stores displaying a Tax Free sign, it is necessary to inform the seller about the desire to use the Tax Free system.

In order to fill in the e-tax invoice, which allows claiming a VAT refund, it is necessary to show a passport to the seller.

After writing down passport details, the seller will give a signed and stamped e-tax invoice in duplicate.

Along with other information, the e-tax invoice includes the amount of paid VAT and the last date of the VAT refund.

While leaving Azerbaijan, it is necessary to present the purchased goods, e-tax invoice, passport to the customs desk at the airport.

After making the appropriate notes in the e-tax invoice, the representative of the customs desk will seal it.

In conclusion, it is necessary to present the e-tax invoice obtained at the customs desk, to the authorized bank.

Depending on the chosen way, the payment is made in foreign or national currency as follows: 1) cash - immediately after presenting a proper document to the bank; 2) non-cash payment - within 10 days after presenting the credit card details to the bank.

Which products are not covered by Tax Free system?

At present, the Tax Free system does not apply to excisable goods and foodstuffs; medications and medical equipment; products, exempt from VAT in the country; goods which may require an export license; raw or ungraded precious gemstones; precious metal ingots; goods exported from the territory of Azerbaijan in an unaccompanied baggage; vehicles and spare parts; goods exported by mail or through the Internet.

Who does not the Tax Free system apply to?

The Tax Free system does not apply to the Azerbaijani citizens, stateless people and foreigners who have received a permit for temporary or permanent residence in the territory of Azerbaijan or get a work permit for paid employment, air transport, as well as maritime transport crew members, who are performing their duties, people under 14 years old.