Azerbaijan: Update on country-by-country reporting

An overview of country-by-country reporting rules

An overview of country-by-country reporting rules

Country-by-country (CbC) reports in Azerbaijan must be submitted by:

  • The group parent company or authorized entity, or
  • By the Azerbaijani tax resident entity of the group if any of the following apply:
    • If the group parent company or authorized entity does not bear CbC reporting liability under the laws of the country of residence
    • If it is operating in Azerbaijan and has a total income of more than €750 million in the financial year (the same as tax or calendar year)
    • If by the end of the reporting year, there is no CbC report exchange agreement between the Azerbaijani tax authorities and tax authorities of the country of residence of the group parent company or authorized entity, or
    • If the Azerbaijani tax authorities notify the Azerbaijani tax resident that according to a notification from the foreign tax authorities, the group parent company or authorized entity did not file the CbC report

If the CbC report is to be filed by the authorized entity of the group by the end of the tax year and the following conditions are met, then the Azerbaijani tax resident entity of the group will not be required to file the CbC report:

  • If CbC report is required by the country of residence of the authorized entity.
  • If there is an agreement between tax authorities of Azerbaijan and tax authorities of the country of resident of the authorized entity.
  • If the tax authorities of the country of residence of the authorized entity notify the Azerbaijani tax authorities that no CbC report was filed by the authorized entity.
  • If by 30 June, the entity files a CbC reporting notification with the Azerbaijani tax authorities.

The CbC report for 2020 is to be filed by the end of this year—31 December 2021—other than in instances of specific request from the tax authorities—and would depend on the following factors:

  • Whether the group parent company or authorized entity files such report in the respective country of residence
  • Whether there is an exchange agreement between Azerbaijan and the country of residence of the group parent company or authorized entity

Read a June 2021 report prepared by the KPMG member firm in Azerbaijan 

 

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