Azerbaijan might phase out income tax benefits for private sector workers

Income tax benefits introduced in Azerbaijan in 2019 for employees in the non-oil and non-state sectors might not be extended beyond 2025, Report informs.

If the benefits are ceased, starting in 2026, individuals earning up to 2,500 manats per month will pay a 3% income tax. This rate will rise to 5% in 2027 and 7% in 2028.

For those earning between 2,500 and 8,000 manats monthly, income tax will be applied as follows:

• In 2026: 75 manats + 10% of the portion of income exceeding 2,500 manats

• In 2027: 125 manats + 10% of the portion of income exceeding 2,500 manats

• In 2028: 175 manats + 10% of the portion of income exceeding 2,500 manats

For individuals earning over 8,000 manats per month, the tax will be:

• In 2026: 625 manats + 14% of the portion of income exceeding 8,000 manats

• In 2027: 675 manats + 14% of the portion of income exceeding 8,000 manats

• In 2028: 725 manats + 14% of the portion of income exceeding 8,000 manats

These tax benefits were originally introduced for a seven-year period to encourage salary transparency in the private sector. They will expire at the end of 2025.

1 manat = $0.58 (according to the exchange rates on October 22, 2025)