All generated revenues from cryptocurrency operations will be taxed in Azerbaijan, said Nidjat Imanov, Deputy Director of the Department of Tax Policy and Strategic Studies at the Ministry of Taxes.
Imanov made clear the position of his department during the Financial and Investment Forum that was held in the capital Baku. He stated:
“This is formalized as a profit tax for legal entities and income tax for individuals. If a person bought a cryptocurrency and then sold it after its price has increased, this amount is recorded as income and therefore should be attracted to taxation.”
Very swift growth on the market was experienced from May to December 2017 and according to the experts, purchase and sale of cryptocurrency is one of the popular ways for earning money on Azerbaijan's cryptocurrency market. Elnur Guliyev, director and founder of a crypto consulting company said that one could gain by even investing $10 in whichever cryptocurrency.
Tax on any profit stands at 20% while other taxes on incomes that include those earned by residents whether within the country or in the diaspora, are subject to income tax also. Tax on revenues is subject to an advanced taxation plan in which salary that is less than 2,500 AZN monthly (approx. $1,500) is charged with a 14% tax and 25% tax to any income exceeding this amount.
In December 2017, Elman Rustamov, Chairman Central bank of Azerbaijan stated that “cryptocurrencies are not recognized as a legitimate means of payment. Cryptocurrencies continue to be a dangerous instrument for investing, regulations should be adopted.”
Center for the Study and Development of Cryptocurrency Markets and Blockchain Technologies was earlier this month set up to conduct educational work, offer consulting services and prepare regulatory proposals. It will further aim at putting blockchain technologies into reality in all corporate and banking sectors and offer support to projects that are funded via Initial Coin Offerings.