Baku, August 19, 2025 — Azerbaijan’s State Tax Service has issued guidance on how income from cryptocurrency operations will be taxed under the country’s legislation.
According to the statement, individuals who earn income from crypto transactions are required to register with tax authorities and obtain a taxpayer identification number (TIN).
“A mechanism exists in Azerbaijani tax law for taxing income from non-entrepreneurial activities, including income from cryptocurrency transactions. Individuals receiving such income must fulfill their obligations by registering with the tax authorities,” the service noted.
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Under Article 99.3.8 of the Tax Code, any income that increases the value of a taxpayer’s assets—aside from wages—is considered non-entrepreneurial income. Article 101.2 specifies that such annual income is taxed at a flat rate of 14%.
Taxpayers must file a personal income declaration by March 31 of the following year and pay the tax to the state budget. The taxable amount is calculated as the difference between the acquisition price of the cryptocurrency and its value at the time of sale.
The clarification signals Azerbaijan’s intent to formally integrate the fast-growing crypto sector into its fiscal system. However, financial experts warn that the flat tax may present compliance challenges for small-scale traders and could affect the pace of crypto adoption in the country.
