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Foreigners not to pay for money transfers from Azerbaijan

25 January 2016 10:58 (UTC+04:00)
Foreigners not to pay for money transfers from Azerbaijan

By Nigar Orujova

Foreign citizens will not pay 20-percent mandatory fee on remittances from money transactions from Azerbaijan to abroad, Azerbaijan’s Finance Minister assures.

The Parliament adopted last week amendments the law on currency regulation, which envisages introducing a 20 percent mandatory fee for the money transfer abroad as direct investment for the purchase of securities, real estate and land plots, as well as for maintenance of foreign offices of Azerbaijani companies in an amount exceeding $50,000 during a year. This will not cover the legal entities, the state share in the equity capital of which exceeds 50 percent.

Foreigners will not be paying any fee for the transfer abroad, just the 10 percent revenue tax, the minister added.

“For instance, if a foreigner invests $10 million in Azerbaijan and increases this investment to $15 million within several years, he earns an additional $5 million,” Samir Sharifov said, adding that the mentioned $5 million is subjected to all the necessary taxes.

This measure also will not affect the transfers abroad for medical treatment, education, execution of decisions of courts and law enforcement agencies outside of Azerbaijan.

Currency exported as direct investment for the purchase of securities, real estate and land, as well as for the maintenance of Azerbaijani companies’ foreign missions also will be taxed with a mandatory fee of 20 percent.

Oil-rich Azerbaijan, that has faced two devaluations in 2015, now figures out ways of solution of the unpleasant economic situation, on the background of the constantly falling prices for “black oil”.

Earlier, Fitch Ratings said Azerbaijan's introduction of capital controls does not automatically have consequences for its 'BBB-'/Stable sovereign rating.

The measures will support the manat and reduce the pressure on buffers, which are a key strength of Azerbaijan's credit profile. But this may be offset by the impact of devaluation, capital controls, and low oil prices on the economy, budget, and banking sector.

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Nigar Orujova is AzerNews’ staff journalist. Follow her on Twitter: @o_nigar

Follow us on Twitter: @AzerNewsAz

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