Azerbaijan.US
While it is difficult to predict developments across all sectors in 2026, a number of economic changes are already clearly defined. These include adjustments to taxation, social insurance, tariffs, excise duties and import regulations.
Personal Income Tax
From 2026, several temporary tax incentives will expire. Salaries in the private non-oil sector will be subject to phased income taxation as follows:
income up to 2,500 manats – 3%
Stay Ahead with Azerbaijan.usGet exclusive translations, top stories, and analysis — straight to your inbox.income from 2,500 to 8,000 manats – 10%
income exceeding 8,000 manats – 14%
At the same time, the income tax rate on rental income earned by individuals will be reduced from 14% to 10%.
Social and Health Insurance
From 2026, all individual entrepreneurs will be required to pay mandatory state social insurance contributions amounting to 2% of turnover, with payments capped between 60 and 400 manats, depending on income.
For individuals working without an employment contract, free access to compulsory health insurance services will be discontinued. Such individuals will either have to pay an annual insurance contribution of 192 manats or cover medical expenses out of pocket.
Vehicles and Imports
After several years of exemption, the import and sale of hybrid and electric vehicles will again be subject to value-added tax (VAT).
Excise coefficients on the import of conventional vehicles older than seven years will also increase:
petrol vehicles – from 1.2 to 1.5
diesel vehicles – from 1.5 to 2.0
At the same time, the sale of passenger vehicles manufactured domestically, as well as the import of spare parts for trucks, will be exempt from VAT for a period of seven years.
VAT and the Services Sector
From January 1, 2026, the mandatory VAT registration threshold in retail trade and service sectors will be raised from 200,000 to 400,000 manats.
In addition, barbershops, beauty salons and cosmetology centers will be added to the list of sectors eligible for partial VAT refunds.
Excise Taxes and Mobile Devices
In 2026, excise tax rates will be increased on:
alcoholic beverages,
tobacco products,
energy drinks.
At the same time, mobile devices and quadricycles will be included in the list of excisable goods. A fixed excise tax of 20 manats per mobile phone will be applied.
Individuals will continue to be allowed to import one mobile phone per calendar year duty-free. Each additional device will be subject to a state fee of 100 manats.
Electricity and Gas Tariffs
From 2026, a monthly fixed tariff will be introduced:
1 manat for households,
3 manats for non-household consumers (enterprises and organizations).
The fixed fee will apply to both electricity and natural gas consumption.
Fuel Prices
From the beginning of the year:
the price of AI-92 gasoline has increased from 1.10 to 1.15 manats per liter;
diesel fuel has risen from 1.00 to 1.10 manats per liter.
Minimum Subsistence Level
For 2026, the minimum subsistence level has been set at:
300 manats nationwide on average,
317 manats for the working-age population,
245 manats for pensioners,
260 manats for children.
Overall, the subsistence minimum has increased by 15 manats, or approximately 5%.
