In recently published Doing Business report of the World Bank Group which has measured 190 economies, Azerbaijan has significantly improved its position. By virtue of implemented reforms, Azerbaijan compared with previous report rebounded 32 spots reaching 25th position among 190 states.
In Europe and Central Asia, Azerbaijan implemented eight reforms making it easier to do business in 2017/18, a record number among the 10 top improvers and globally. Several of these reforms involve institutional changes. Azerbaijan opened a single window at the Baku City Executive Office for dealing with construction permits, reducing the time and cost to obtain a building permit. Another one-stop shop—the ASAN Communal facility—streamlined the process of connecting to the electricity grid. To improve access to credit, Azerbaijan established a new credit bureau and a new unified collateral registry.
Azerbaijan has improved its ranking from 18 to 9 on “Starting a business” indicator. This is mainly due to reduction in procedures and costs. Notarizing lease agreement is no longer needed for a company and the cost of ASAN Imza (electronic signature) has been reduced. Azerbaijan applies electronic registration both for legal persons and individual entrepreneurs for starting business.
Azerbaijan was ranked 28th on “Paying taxes” indicator. Azerbaijan made paying taxes easier by introducing e-invoicing and a unified tax return for social security contributions and enhancing the online platform for filing corporate income tax.
The government of Azerbaijan adopted new law which made the issuance of e-invoices mandatory for legal entities and individual entrepreneurs in respect to sales of goods and provisions of services and works. The new requirements for invoicing became effective from January 1, 2017.
Additionally, in 2017, the social security authority introduced a new format for filing and paying mandatory social contributions. The new format represents a unified quarterly filing and payment form that collects and reports all information on workers earnings, as well as taxes and contributions for each reporting quarter. Previously, a separate annual report was required. The new form is also prefilled with information from the social security authority's database on quarterly bases and is ready for submission if no revisions are required.
Over the past years, the tax authority in Azerbaijan has improved its online system for filing and payment of corporate income tax including a direct digital connection of the accounting software used by taxpayers with the tax authority’s data exchange network.