August 2026 VAT non-resident providers of e-services replaces Withholding Tax
From 23 August 2026, non-resident providers of digital services to Azerbaijani consumers will be mandated to register with the tax administration and levy 18% VAT. Currently, there is a voluntary VAT regime – where no registration is undertaken, a Withholding Tax applies.
The Azerbaijan Ministry of Economy State Tax Service full legislative amendments have no been approved, missing the original 1 Jan 2026 deadline.
Full implementation guidance and FAQ’s are expected prior to August. Expected key points include:
- services include those remotely provided via electronic means
- Online eduction with live teaching is excluded, as are similar direct professional services
- applies to B2C transactions only
- VAT registration threshold of AZN 17,000 per annum
New VAT registration portal
In June 2024, the tax authorities launched a VAT registration portal wishing to provide a VAT inclusive services.
The current VAT rate in Azerbaijan is 18%, and must be split from the payment via payment providers. This includes credit card merchants, banks, payment e-wallets and others. This excludes payments for hotels and aeroplane bookings.
What e-services are liable to VAT in Azerbaijan?
Income from the following services is liable to VAT at 18% on domestically supplied services (non-residents from Aug 2026):
- Telecoms data and voice
- TV and radio broadcasting
- Gaming and games of chance
- e-books
- E-learning
- Apps
- SaaS or cloud-based software
- Streaming or download software
- Online storage
- Advertising
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Asia Pacific VAT on digital services
| Comments (click for details) | Rate | Date | Threshold | Comments |
| Australia | 10% | Jul 2017 | AUD $75,000 | |
| Azerbaijan | 18% | Jan 2017 | $10,000 | Mandatory 2026 |
| Armenia | 20% | Jan 2022 | AMD 115million | |
| Bangladesh | 5% - 15% | Jul 2019 | – | B2B and B2C |
| Bhutan | 7% | Jan 2026 | Nu 5million | |
| Cambodia | 10% | Mar 2022 | KHR 250m | |
| China | 6%-13% | N/a | Nil | Withholding VAT; B2B and B2C |
| Cook Island | 15% | 2019 | NZ$ 40,000 | |
| Fiji | 9% | TBC | FJD 300,000 | |
| India | 18% | Jul 2017 | - | |
| Indonesia | 12% | Aug 2020 | IDR600m or 12k customers | |
| Japan | 10% | Oct 2015 | JPY 10 million | |
| Kazakhstan | 16% | Jan 2022 | Nil | |
| Kiribati | 12.5% | 2017 | AU$ 100,000 | |
| Kyrgyzstan | 12% | Jan 2022 | Nil | |
| Laos | 10% | Feb 2022 | LAK 400m | |
| Malaysia | 8% | Jan 2020 | RM500,000 | |
| Nepal | 13% | Jul 2022 | Rupees 2m | Also 2% DST |
| New Caledonia | 11% | 2020 | XPF 7.5 million | |
| New Zealand | 15% | Oct 2016 | NZD 60,000 | |
| Pakistan | 2% | Sep 2021 | Nil | Marketplace Withholding VAT |
| Palau | 10% | Jan 2023 | $300,000 | |
| Philippines | 12% | 1 Jun 2025 | P 3million | |
| Singapore | 9% | Jan 2020 | S$ 100,000 | |
| South Korea | 10% | Jul 2015 | Nil | |
| Sri Lanka | 18% | Jul 2026 | LKR 60m | |
| Taiwan | 5% | May 2017 | NTD 600,000 | |
| Tajikistan | 14% | Jan 2021 | ||
| Thailand | 7% | Sep 2021 | 1.8m Baht | |
| Uzbekistan | 12% | Jan 2020 | Nil | |
| Vietnam | 10% | Dec 2020 | – |
