Azerbaijan introduces tax incentives to support public-private partnership and green economy projects

In a significant move to promote sustainable development, Azerbaijan has introduced tax incentives to support projects under public-private partnerships (PPP) and the green economy.

Report informs, citing the State Tax Service, that one of the key amendments to the Tax Code, effective from January 1, 2025, focuses on encouraging electricity production from renewable sources.

The tax incentives are designed to facilitate the implementation of projects related to service provision, creation, and management of necessary infrastructure within the PPP framework, as well as the production of electricity from renewable energy sources. Private partners and producers involved in PPP projects and green energy initiatives will benefit from exemptions on profit tax, property tax, land tax, and VAT on imports (goods and equipment). The duration of the tax incentives will be determined in the contracts but cannot exceed 30 years.

These measures aim to enhance the investment climate, attract private and foreign investments in key economic sectors, and support projects implemented by the private sector with state obligations to purchase electricity.