Azerbaijan working to exempt Islamic financial transactions from VAT

Azerbaijan is working to exempt Islamic financial transactions from value-added tax (VAT), Rustam Tahirov, director of the Financial Sector Sustainable Development Department at the Central Bank of Azerbaijan (CBA), said at the 2nd Azerbaijan Halal Business Forum (AZHAB), Report informs.

According to him, several key factors must be in place to realize the full potential of Islamic finance in Azerbaijan.

"It is important to create a level playing field between traditional and Islamic financial services. This requires adapting financial regulation to the specifics of Islamic financial products. At the same time, harmonizing Islamic financial product transactions from a tax perspective is crucial. We know that some financial services are exempt from value-added tax (VAT). Therefore, it is important to apply the same principles to Islamic financial transactions. We are currently working in this direction in collaboration with the relevant government agencies," Tahirov said.

He emphasized that capacity building and personnel training are a second important factor.