/By AzerNews/

By Aynur Jafarova

Azerbaijan plans to introduce a new preferential system for taxation of profits as part of measures to facilitate the process of listing of companies' securities, Head of Research and Market Development of the State Securities Committee Nurlan Fatullayev said on December 24.

Addressing an event called "A look into the future", he noted the SSC has prepared proposals to create a favorable tax environment in Azerbaijan’s securities market.

“The proposals have already been submitted to the Ministry of Taxes, and we expect that they will be considered in 2015,” Fatullayev said.

He went on adding that the proposals provide options for or against the double taxation approach.

“If a double taxation approach is used, we propose to eliminate a deduction of 10 percent tax of the paid dividends from the source of payment. We also call for excluding the dividends received from the taxable investor base. In case of non-use of double taxation approach, we propose not to use deduction of a 10 percent tax during dividend payment between the legal entities, the received dividends from the taxable base of the receiving party and apply deduction of a 10 percent tax from the source of payment on dividends received by an individual,” Fatullayev noted.

He also added the State Securities Committee offers a separate system of taxation of income and losses from the sale of securities.

“We propose to put a 10-15 percent tax on income from the sale of short-term securities and a 5 percent tax on income from the sale of long-term securities,” Fatullayev said. “At the same time, we propose to cover losses from the sale of securities in the next 5 years at the expense of the income from this activity.”

It is also proposed to include the service of storing securities in the base of financial services and free securities from VAT.

Currently, the tax rate in Azerbaijan is 18 percent.