The Tax Code of the Republic of Azerbaijan

(Approved by the Law No.905-IG of the Azerbaijan Republic from 11 July, 2000)

General Part

Chapter 1. General Provisions

Article 1. Relations Regulated by the Tax Code of Azerbaijan Republic

1.1. This Code shall establish the tax system of the Republic of Azerbaijan, general principles of taxation in the Azerbaijan Republic, rules for determining, payment and collection of taxes, the rights and responsibilities of taxpayers and State tax authorities, as well as other parties to taxation procedures, tax control forms and methods, liability for tax law violations and the procedures for lodging complaints against unlawful actions (failure to take actions) committed by tax agencies and officials thereof.

1.2. This Code establishes the general principles of taxation and taxes for Nakhichevan Autonomy Republic and municipalities.

Definitions and rules determined in this Code shall be established for the purposes of tax payment and used only within the scope of taxation and tax control regulated by this Code and other legislative acts established on its basis.

Article 2. Tax Legislation of Azerbaijan Republic

2.1. The Constitution of Azerbaijan Republic, this Code, and those legal standards adopted in compliance herewith, shall comprise the tax legislation of Azerbaijan Republic.

2.2. Any article of law adopted on the basis of this Code or for the purposes of its execution shall not contradict with the provisions of this Code.

2.3. Should tax legislation contradict any legislation in other areas, with the exception of provision stipulated by Article 2.7. of this Code, the provisions of tax legislation shall apply.

2.4. Taxation and tax control issues can not be included into the legislative acts, other than tax legislation, with the following exceptions:

2.4.1. provisions concerning administrative offences in relation to tax issues, stipulated by the Code of the Azerbaijan Republic for Administrative Offences;

2.4.2. provisions concerning tax crimes included in the Criminal Code of the Azerbaijan Republic;

2.4.3. provisions concerning the priority of tax obligations included in the legislation on bankruptcy and insolvency;

2.4.4. provisions on taxes contained in budget legislation;

2.4.5. provisions governing state maintenance allocation and guarantees on taxes;

2.4.6. provisions stipulated by agreements or laws on production sharing, main pipeline and other similar agreements and laws;

2.4.7. provisions stipulated by the legislation on oil and gas operations of export direction and special economic areas.

2.5. Should any international treaty to which the Republic of Azerbaijan is a party provide for regulations that differ from those contained in this Code and legislative acts established on taxes, the provisions of said international treaties shall govern.

2.6. If international treaty with the intention of avoiding double taxation to which Azerbaijan Republic is the party applied by any person, who is not the resident of the state that entered into such treaty for the purpose of obtaining tax privileges, provisions of article 2.5. of this Code shall not be applied for the purposes of tax privileges to the resident of the state that is the party to such treaty.

2.7. If production sharing or main pipeline agreements approved by the legislation before this Code is entered into force or after its enforcement, as well as other laws and agreements of a similar nature, including the legislation on oil and gas, contain provisions that differ from those stipulated by this Code and other legislative acts on taxes then provisions of such agreements and laws shall be applied.

2.8. In the event of required changes to the Tax Code of the Azerbaijan in connection with definition of tax policy, tax administration and tax rates within the next year state budget draft, the drafts of these laws shall be submitted to the Milli Mejlis of the Azerbaijan Republic no later than by May 15 of current year.

Article 3. Basis for establishment of taxes and their collection

3.1. Legislation on taxes is based on the universality, equality and fairness of taxation

3.2. Taxes shall have an economic base.

3.3. It is not allowed to establish taxes that will limit everybody’s constitutional rights and freedom.

3.4. It is not allowed to establish taxes that will break the single economic system of Azerbaijan Republic (in particular those that will directly or indirectly limit the free movement on the territory of Azerbaijan Republic (of goods and services) and monetary means, or otherwise limiting the legal activities of taxpayers).

3.5. Nobody can be forced to pay the tax of one nature from the profit (income) for more than one time.

3.6. The taxes shall not be of discriminatory nature and shall not be established based on the political, ideological, ethnic, confessional or other existing differences between taxpayers.

It is prohibited to establish different tax rates based on the form of ownership, citizenship of physical persons or origin of capital.

It is allowed to establish different rates of customs duties for commodities imported into the territory of Azerbaijan Republic, dependant on commodity’s country of origin in accordance with this Code and customs legislation.

3.7. Taxes in the Azerbaijan Republic shall be established only by this Code; changes or cancellations shall be implemented by making the changes in this Code.

3.8. No person can be obliged to pay taxes, that have indications of taxes established by this Code but not established by it or taxes that were established in the order different to that specified by this Code.

3.9. The tax legislation shall be formulated in the order that will allow everyone to know what taxes, in which order, when and how much he shall pay.

3.10. The tax system shall stimulate the activities of entrepreneurs and investors.

3.11. All contradictions and obscurities and uncertainties in the tax legislation shall be interpreted for taxpayer’s advantage.

3.12. Natural and legal persons shall have a free access to regulating legislative acts on taxes.

Article 4. The tax system of Azerbaijan Republic

4.1. The taxes levied in the Republic of Azerbaijan pursuant to this Code shall be as follows:

4.1.1. state taxes;

4.1.2. taxes of autonomy republic;

4.1.3. local (municipal) taxes.

4.2. State taxes are those taxes that are stipulated by this Code and are obligatory for payment on the entire territory of Azerbaijan Republic.

4.3. The taxes of Autonomy Republic are those taxes that are stipulated by the laws of Nakhichevan Autonomy Republic in accordance with this Code and obligatory for payment in the Nakhichevan Autonomy Republic.

4.4. Local (municipal) taxes are those taxes stipulated by this Code and applicable legislation, applied by the resolution of municipalities and obligatory for payment on the territory of municipalities. Other obligatory payments applied by municipalities shall be stipulated by the appropriate legislation.

Local (municipal) taxes rates shall be established within limits stipulated by tax legislation. In accordance with tax legislation municipalities shall be entitled to make decisions on complete or partial tax release or decrease of tax levels for certain categories of taxes paid by taxpayer in their areas.

4.5. In accordance with this Code special tax regime can be applied on the territory of Azerbaijan Republic.

The special tax regime stipulates the special procedure for tax calculation and payment for the specified period of time.

4.6. It is not allowed to levy taxes that are not stipulated by this code.

Article 5. Forms of taxation

5.0. Amounts of tax shall be collected in following forms:

5.0.1. directly from the source (tax collection before obtaining income or profit);

5.0.2. by declaration (tax collection after obtaining income or profit);

5.03. by notice (payment of the tax by taxpayer on the basis of payment notice, issued for the sum, calculated by taxation authority or municipality on the basis of cost of the taxation object and area).

Article 6. State taxes

6.1. Following are state taxes:

6.1.1. tax on the income of physical persons;

6.1.2. tax on the profit of legal entities (with the exception of entities and enterprises that are the property of municipalities);

6.1.3. value added tax;

6.1.4. excise tax;

6.1.5. property tax levied from legal persons;

6.1.6. land use tax levied from legal persons;

6.1.7. road fund taxes;

6.1.8. mineral royalty tax;

6.1.9. simplified tax.

6.2. This code establishes maximum rates for all state taxes.

6.3. State tax rates introduced on yearly basis shall not exceed the rates established by this Code and those shall be reconsidered annually during the approval of state budget legislation of the Azerbaijan Republic.

Article 7. Taxes of Autonomy Republic

The taxes of autonomy republic are the state taxes levied in the Nakhichevan Autonomy Republic, listed in article 6.1. of this Code (with the exception of Road Fund Tax).

Article 8. Local (municipal) taxes

8.1. Following are the local (municipal) taxes:

8.1.1. land use tax levied from natural persons;

8.1.2. property tax levied from natural persons;

8.1.3. mineral royalty tax on construction materials of local importance;

8.1.4. profit tax of enterprises and organizations that are the property of municipalities.

8.2. Procedures for calculation and payment of local taxes, roles and responsibilities of taxpayers and tax authorities of local municipalities, pro-forma and methods of tax control, liability for violation of tax legislation, complaint procedures for actions or non-actions of municipal tax authorities and their officers are determined under relevant legislation.

Article 9. Tax calculation and payment currency

On the territory of Azerbaijan Republic taxes are calculated and paid in the currency of Azerbaijan Republic- manats.

Article 10. Parties of relations regulated by tax legislation

10.0. Following are the parties of relations regulated by tax and levy legislation:

10.0.1. natural and legal persons recognized by this Code as taxpayers;

10.0.2. natural and legal persons recognized by this Code as tax agents;

10.0.3. state tax authorities of the Azerbaijan Republic;

10.0.4. customs authorities of the Azerbaijan Republic;

10.0.5. financial authorities of the Azerbaijan Republic, in the link with solution of issues stipulated by this Code;

10.0.6. state power authorities, local self-management bodies, other authorized bodies and officials, other than tax and customs authorities that conduct the collection of financial means from taxpayers for the purposes of tax collection and their bank transfers to the state budget in cases stipulated by this Code.

Article 11. Definition of Tax

Tax — a compulsory, individual and non-refundable payment made to the state or local budget in the form of collection of monetary means from taxpayers with the purpose of providing the financial basis to the state and municipal activities.

Article 12. Main terms of tax institution

12.1. The tax shall be considered as instituted only if taxpayers are determined as well as following elements of taxation:

12.1.1. subject of taxation;

12.1.2. basis for taxation;

12.1.3. tax period;

12.1.4. tax rate;

12.1.5. tax calculation procedure;

12.1.6. tax payment procedure and timing;

12.2. During tax institution privileges can be established on basis stipulated by this Code.

12.3. Subjects of taxation are: income, profit, property, land, minerals, value of sold commodities (works, services) or other subjects of taxation stipulated by this Code.

12.4. Taxation base- the quantitative expression of the part of subject of taxation from which the tax is levied.

Article 13. Main definitions used in this Code

13.1. The definitions of civil, family and other areas of the legislation of Azerbaijan Republic used in this Code shall be interpreted as determined in these areas of legislation, unless otherwise stipulated by this Code.

13.2. Following definitions are applied for the purposes of this Code:

13.2.1. Person- any physical or legal person, permanent representation, branch or other section of non-resident;

13.2.2. Legal person- enterprises and entities established with the status of legal person in accordance with the legislation of Azerbaijan Republic or legislation of foreign state.

13.2.3. Natural person- citizen of Azerbaijan Republic, foreigner and person without citizenship.

13.2.4. Taxpayer- any person who shall pay taxes from subjects of taxation determined in accordance with this Code.

13.2.5. Resident:

13.2.5.1. the natural person to whom one of the following requirements can be applied:

1. who actually was on the territory of the Republic of Azerbaijan for a total of more than 182 days during any 12-month period ending in a calendar year;
2. was in the State service abroad for the Republic of Azerbaijan during the calendar year or within one calendar year;
3. if natural person’s period of stay on the territory of Azerbaijan Republic and foreign state (in any) does not exceed the period of 182 days in accordance with indention two and three of paragraph 13.2.5.1. of this Code then this physical person shall be deemed as the resident of Azerbaijan Republic based on criteria set in following order:
4. permanent place of residence;
5. place of vital interests;
6. place of normal residence;
7. citizenship of the Azerbaijan Republic.

13.2.5.2. The natural person shall be recognized as non-resident of the Azerbaijan Republic from the last day of his stay on the territory of Azerbaijan Republic during the tax year, until the end of this tax year only if this person is non-resident of Azerbaijan Republic in the following tax year.

13.2.5.3. Any legal person established in accordance with the legislation of Azerbaijan Republic and involved in entrepreneur activities or with the place of management on the territory of Azerbaijan Republic. For the purposes of this Article the legal entity management location shall be deemed the location of main operations, in which the commercial decisions are taken as required for management, and at which the daily practical management is performed, independent of location of main control bodies.

13.2.6. Non-resident:

13.2.6.1. persons holding diplomatic or consular status on the territory of Azerbaijan Republic, or family members of such persons;

13.2.6.2. staff members of international organizations that had passed the appropriate state registration on the territory of Azerbaijan Republic or person on the national service of foreign country in the Azerbaijan Republic, as well as their family members;

13.2.6.3. person passing from one foreign country to another through the territory of the Republic of Azerbaijan;

13.2.6.4. articles 13.2.6.1. and 13.2.6.2. of this Code not to be applicable for persons involved in entrepreneur activities on the territory of Azerbaijan Republic.

13.2.6.5. diplomatic representations, consular organizations and other official representations of foreign states that hold the diplomatic privileges and immunity, international organizations and their representations as well as representations of foreign companies and firms not involved in entrepreneur activity;

13.2.6.6. other persons, to whom the definition of resident not to be extended.

13.2.7. Taxpayer’s family members:

13.2.7.1. spouses;

13.2.7.2. parents, children and adopted persons;

13.2.7.3. heirs;

13.2.7.4. blood relative (not blood relative) sisters (brothers);

13.2.7.5. nephews and nieces;

13.2.7.6. sisters, brothers and parents of spouses;

13.2.7.7. spouses of sisters and brothers;

13.2.7.8. sisters (brothers) of parents;

13.2.7.9. guardians and wards, when linked to each other as the result of same household management as parents and children.

13.2.8. «Goods» - any tangible or intangible property (assets), including electrical and heat energy, gas and water.

For the purposes of value added tax (VAT) intangible assets, monetary means and land shall not be recognized as goods.

13.2.9. Intangible assets- intellectual property, including trade marks, other aspects of industrial property as well as similar rights recognized as the property of taxpayer in the order established by appropriate legislation.

13.2.10. Sell of goods- concession of the right of ownership on goods to other person; including, but not limited to, sell of goods, their exchange, donation, payment in kind for labour and other in kind payments, as well as the transfer of right of ownership on mortgages to the lender or other person;

13.2.11. Service (work) - activity that does not involve provision of any commodities and has financial value.

For VAT purposes the transfer of ownership on monetary means and land to other party as well as provision of contracted employee services is not allowed.

If commodities used during provision of services (implementation of works) are not provided separately or compensation costs not included in the value of services (works) and are not indicated separately in the agreement or payment documents, such goods or commodities shall be considered an integral part of the service (work).

13.2.12. Non-sale incomes- income from holding shares in other enterprises, incomes obtained from sales of enterprise stocks, bonds and other securities, as well as other incomes obtained from operations indirectly linked with production and sales of commodities and services (works), including the amount obtained as penalty or loss compensation, increased exchange variation, amount of creditor and deponent debts on foreign exchange operations in accordance with legislation.

13.2.13. Name of taxpayer, buyer, customer or any person - name of legal entity passed state registration, full name of natural person.

13.2.14. Financial Services:

13.2.14.1. the granting or transferring of credits, financial leasing operations, credit guarantees and other pledge guarantees in monetary-credit transactions, including the management of credits and credit guarantees by the grantor;

13.2.14.2. any transaction connected with the management of deposits and accounts of clients, payments, transfers, debt obligations and payment instruments;

13.2.14.3. any transaction connected with the circulation of currency, monies or bank notes that are legal tender (with the exception of those used for numismatic purposes);

13.2.14.4. any transaction connected with the circulation of shares, bonds, certificates, bills, checks or other securities. Services on safekeeping of bills, securities and other valuables are not financial services;

13.2.14.5. any transaction relating to financial derivatives, forward contracts, options and similar arrangements;

13.2.14.6. any service related to the management of investment funds;

13.2.14.7. any insurance or re-insurance transactions.

13.2.15. Dividend — payment in money or other form, made by legal person to its founders (or shareholders) as distribution of net income, profit upon the payment of all costs and taxes by payers of simplified tax.

Income from the distribution of property upon liquidation of a legal entity, as well as payments made with distribution of shares without changes to percentage of shares owned by shareholders and re-call of stocks (shares) within their nominal price, shall not be considered a dividend.

13.2.16. Income from an Azerbaijani Source -

13.2.16.1. income derived from employment in the Republic of Azerbaijan;

13.2.16.2. income derived from sale by manufacturer of goods produced in Azerbaijan Republic;

13.2.16.3. income derived from producing goods, performing work or rendering services in the Republic of Azerbaijan;

13.2.16.4. income derived from an entrepreneurial activity attributable to a permanent establishment located on the territory of the Republic of Azerbaijan, to include income from the sale of similar goods (works, services), that can be considered as goods (works, services) sold by said permanent establishments as well as income from activity that can be considered as activity implemented by such permanent establishment or comparable activities;

13.2.16.5. income derived from an entrepreneurial activity on the territory of Azerbaijan Republic:

1. from writing off bad debts of taxpayer by creditors;
2. from selling fixed assets defined as income pursuant to Article 114.7 of this Code;
3. from compensation of costs or decrease of reserves pursuant to Article 141 of this Code;

13.2.16.6. income in the form of dividends received from a resident legal entity and from the realization of an equity share in said legal entity;

13.2.16.7. income in the form of interest received from residents;

13.2.16.8. pension paid by a resident;

13.2.16.9. income in the form of interest received from a person with a permanent establishment or property located in the territory of the Republic of Azerbaijan - if the indebtedness of said person relates to said permanent establishment or property;

13.2.16.10. income in the form of royalties paid in connection with location or use of property located on the territory of the Republic of Azerbaijan, or income from the sale of property stipulated in paragraph 13.2.23 of this Article, which is located or used in the Republic of Azerbaijan;

13.2.16.11. income from the lease of movable property utilized in the Republic of Azerbaijan;

13.2.16.12. income from real property in the Republic of Azerbaijan, including from the transfer of participating shares in said property;

13.2.16.13. income from the transfer of stocks or participating shares of an enterprise whose assets, exceeding 50 percent, directly or indirectly, from the value of real property in the Republic of Azerbaijan;

13.2.16.14. other income arising from the transfer of property that is not connected with resident’s entrepreneurial activity;

13.2.16.15. income from management, finance services - if such income is paid by a permanent establishment of resident or non-resident legal person located in the Republic of Azerbaijan, or if said income has been generated by virtue of a contract signed with said enterprise or permanent establishment;

13.2.16.16. income paid as insurance payment under agreements on the insurance or re-insurance of risks;

13.2.16.17. income from telecommunication and transportation services during international communication and shipments between the Republic of Azerbaijan and other states;

13.2.16.18. other income arising by virtue of activity in the Republic of Azerbaijan, which is not stipulated in above paragraphs. When determining the source of income according to this paragraph, the place where the income is paid shall not be taken into account, as well as either it paid directly or indirectly.

13.2.17. Fixed Assets - tangible assets with a service life of more than one year, the value of which exceeds 100 manats that are subject to amortization in accordance with Article 114 of this Code.

13.2.18. Interests - any charge relating to a debt obligation, including payments for credits (loans) and deposits (accounts).

13.2.19. Net Profit - profit less profit tax;

13.2.20. Participant - shareholder, partner or other participant in an enterprise’s profit.

13.2.21. Property - any moving or real property to include non-tangible assets, turnover funds and other objects of ownership rights.

13.2.22. Residual value of property - the original value of fixed assets on enterprise’s balance less the amount of amortization calculated on this fixed assets.

13.2.23. Royalty - payments for use of copyrights or rights on the use of works of literature, art and science; software and films, and other non-tangible assets, any information of patenting, trade marks, design or model, plan, secret formula or process, industrial, commercial and scientific expertise, use of industrial, commercial or scientific equipment or transfer of rights to use such products.

13.2.24. Cash register — electronic equipment or computer systems used for registration of payments for goods (works, services) provided, with fiscal memory and appropriately registered by tax authorities.

13.2.25. Forward contract- agreement, confirming the obligation to purchase (sell) securities, goods or monetary means in future at specified time and indicated terms at the price indicated at the time of when such forward contract was signed.

13.2.26. Option- the document confirming the right of person to purchase (sell) securities, goods or monetary means in future at specified time and indicated terms at the price fixed at the time of making such option or the time of such purchase by the agreement of parties.

13.2.27. Non-commercial activity- it is a conduct of legal activity the purpose of which is not generation of profit and that stipulates the use of income received in non-commercial purposes only, including the purposes of its charter. Otherwise such activity shall be considered as commercial.

13.2.28. Non-commercial organization- legal person that conducts non-commercial activity, does not distribute the generated income between its founders (shareholders) and does not use such income for commercial purposes. Otherwise such organization shall be considered as commercial.

13.2.29. Export of Goods - removal of goods from the territory of the Republic of Azerbaijan, which are considered export goods according to customs legislation.

13.2.30. Re-export of Goods - export of goods that are considered re-export goods in accordance with customs legislation by the person importing said goods, provided that such goods are in the same condition as were when imported.

13.2.31. Import of Goods - importation of goods into the territory of the Republic of Azerbaijan, which are considered import goods according to customs legislation.

13.2.32. Re-import of Goods - import of goods that are considered re-import goods in accordance with legislation by the person exporting these goods, provided that such goods are in the same condition as were when imported.

13.2.33. Transit through the Territory of the Republic of Azerbaijan - transportation of goods through the territory of the Republic of Azerbaijan between two frontier posts of the Republic of Azerbaijan in accordance with procedures established by customs legislation.

International transportation - cargo and passenger transportation between the Azerbaijan Republic (through the border of the Azerbaijan Republic) and post located in the other state.

13.2.34. Employment- performance of duties by physical person in accordance with agreement (contract) for compensation payment regulated by labor code. Any physical person engaged in employment shall be termed «the employee» in this Code. A person who pays for the service rendered by such physical person as an employee shall be termed «the employer» and said payment shall be termed «the salary».

13.2.35. Charity shall be defined as that activity natural person and/or charity organization performs, which consists of rendering assistance, to include the transfer of monies, without compensation, to physical persons in need of material or other assistance (aid), or to organizations and charitable organizations that directly provide such assistance (aid), including charity organizations. Scientific, educational activities performed in the public interest shall be considered charity except where otherwise stipulated in this Code. Assistance (aid) given shall not be construed as charity if:

13.2.35.1. the recipient of said assistance (aid) assumes any obligation to the provider, which is of a property or non-property nature (with the exception of obligations to utilize the funds or property received as targeted);

13.2.35.2. the recipient and provider of said assistance (aid) are deemed to be interrelated;

13.2.35.3. said assistance (aid) is rendered to any physical person or legal entity with the intent of helping that person or entity participate in an election campaign.

13.2.36. Charity organization- non-commercial organization conducting charity activities.

13.2.37. Entrepreneurial (commercial) activity - any activity of entrepreneur, performed independently, at own risk, with the purpose of profit obtaining from use of the property, supply of goods, fulfillment of works or services.

13.2.38. Budget organization- non-commercial organization activity of which is financed in part or in full with funds from the treasury on a budgetary estimate and which does nor have a payments account.

13.2.39. Enterprise- for the purposes of this Code enterprises are the structures involved in entrepreneurial activities and established for such activities. This is to include:

13.2.39.1. legal entities established pursuant to Republic of Azerbaijan law;

13.2.39.2. legal persons established in accordance with the legislation of foreign state (corporations, companies, firms and other similar structures), their branches and representative offices;

13.2.39.3. branches, sub-elements or other separate units of legal persons, outlined Article 13.2.39.1 of this Code, which have their own balance sheet, separate ledgers or other accounts.

13.2.40. VAT deposit account— single treasury account, on which the operations are performed associated with receipt, registration and movements of VAT and its payment to state budget.

13.2.41. Commercial Legal Entity — structure defined as such by the Civil Code of the Azerbaijan Republic.

13.2.42. Non-commercial legal entity — structure defined as such by the Civil Code of the Azerbaijan Republic.

Article 14. Market value

14.1. Market value - the price of the good (work, service) based on interrelation of demand and supply.

14.2. Unless otherwise stipulated by this article, for the purposes of taxation the price of goods (works, services) fixed for operation (deal) shall be used. Unless otherwise proved this price shall be used as market value.

14.3. The calculation of taxes with consideration of market value can be used:

14.3.1. during barter (swap of goods), import-export operations;

14.3.2. during implementation of deals between interrelated persons;

14.3.3. at price deviation for more than 30 percent (either side) within 30 days from the pricing level applied by taxpayers on analogue or similar goods (works, services).

14.4. The market value shall be determined until the good (work, service) is sold, but not later than 30 days from the moment the good (work, service) is sold at the price established on the closest date (before or after) at appropriate deals on identical (analogue) goods (works, services). The market value of securities shall be determined based on stock exchange rate for identical securities of the same emitter on closest previous date from the moment these securities were sold, only if such rates were announced in accordance with procedure above.

14.5. During the determination of market value, the deal between interrelated persons, as defined in Article 18 of this Code, shall be considered only if their relations did not have any impacts on the result of such deal.

14.6. If provisions of Articles 14.4. and 14.5 of this Code are not applicable, the market value of good (work, service) shall be determined in accordance with requirements of this Article. The regular costs on production and/or marketing (purchase price and residual value) of good (work, service), transportation, storing, insurance and other similar costs shall be considered as well as added values and discounts practiced during deals between non-interrelated persons, that will consider the factor of demand and supply. Specified costs shall be considered also when the good losses its quality or other consumer characteristics or expiration (close expiration) date as well as other similar cases.

14.6.1. Following factors are taken into consideration in determination of the market prices of goods (works, services), which can influence the prices:

14.6.1.1. volume (volume of goods batch) of delivered goods (implemented works and rendered services);

14.6.1.2. obligation execution term, payment provisions;

14.6.1.3. change of demand for goods (works, services) and supply (including seasonal fluctuations of consumer demand);

14.6.1.4. country of origin of goods, place of purchasing or procurement;

14.6.1.5. delivery terms for goods (works, services);

14.6.1.6. the quality level of goods and other consumption indicators;

14.6.1.7. in relation with implemented marketing policy introduction on market of new, non-analogue goods (works, services), or introduction of goods (works, services) to new markets, provision of samples of goods with the purpose of acquiring of consumers;

14.6.1.8. in determination of market prices on execution of works, provision of services, including in the area of repair, construction, installation works, transportation, leasing, education, medical services and other areas, taken into consideration the area of work execution, and provision of services, their qualitative indicators and other circumstances, which can affect the price.

14.6.2. In determination of prices in connection with quality of goods (works, services) below market price, quality levels are confirmed by competent person.

14.6.3. If on relevant goods (works, services) market with similar or same kinds of goods (works, services) no operations are conducted, and it is not possible to collect the information on market prices of these goods (works, services) from official or open sources, following evaluation methods can be applied:

14.6.3.1. On the basis of subsequent (secondary) selling price

Market prices of goods (works, services) are determined on the basis of subsequent (secondary) selling price of these goods (works, services). The market price is determined with deduction of applied raise from subsequent selling price.

14.6.3.2. On the basis of value accumulation method

Market prices are calculated with accumulation of costs and profits, motivated by the party providing goods (works, services).

14.6.3.3. If market prices of goods (works, services) can not be determined by one of the methods established in this Article, market prices are determined by contractor expert.

14.6.4. Determined market prices are used only for the purposes of taxation and goods (works, services) are considered by actual selling price in accordance with procedures stipulated under the legislation.

14.6.5. If the purchasing price of purchased goods (works, services) exceeds the market price for more than 30 percent and its value contains costs deducted from income, the value of these goods (works, services) is assigned for costs deducted from the income on market values, and taxes are re-calculated in following cases:

14.6.5.1. in cases, if unreasonable increase of actual of purchasing price of purchased goods (works, services) is detected;

14.6.5.2. if it is not possible to determine the supplier of goods (works, provider of services).

14.6.6. If the price level applied to provided goods (works, services) of taxpayers, will significantly be below 30 percent level of market values, determined on the basis of this Code, then taxes are calculated on the basis of market prices, and if exceeds it, then on actual provided prices

14.7. The complex of deals, providing the delivery of goods (works, services) by one party and their exchange for other goods are the part goods swapping (works/services swapping) deals. The market value of delivered (purchased) goods (works, services) on the basis of such deals shall be determined in accordance with provisions of this Article.

14.8. The taxpayer holds the right to submit to state tax authority the evidences that market values for goods (works, services) are determined in certain deals in accordance with the procedure that differs from one stated in this article.

14.9. During the determination and recognition of goods (works, services) market value the official sources of information on market values of goods (works, services) and exchange rates, databases of state and local authorities, information submitted by taxpayers to state tax authorities, information of advertisement sources and other appropriate information shall be used.