On 2 October 2026, the State Tax Service convened a roundtable with the Azerbaijan Insurers Association (AIA) to address tax challenges facing the insurance sector, particularly the transition to IFRS 17 (Insurance Contracts) and its interaction with the Insurance Premium Tax Law and VAT legislation. The discussion covered the tax treatment of reinsurance commissions, the deductibility of claim reserves, and the application of the 0% VAT rate on export of insurance services. The Tax Service clarified that the new IFRS 17-based financial statements will be accepted for tax purposes starting with the 2026 fiscal year, provided reconciliation schedules are submitted.
Key Takeaways
- IFRS 17 Tax Alignment: A joint working group will develop a guidance note mapping IFRS 17 line items to the Tax Code’s profit tax computation, to be published by December 2026.
- VAT on Reinsurance: The Service confirmed that reinsurance services provided to non-residents qualify for zero-rated VAT, provided proper documentation (contract, proof of export) is maintained.
- Premix Tax Administration: The Insurance Premium Tax (2% on gross premiums) will be collected via the new “Insurance Tax Module” in the e-taxes system, enabling automatic calculation and monthly remittance from January 2027.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement