BAKU, Azerbaijan, January 1. Mineral extraction and excise taxes in Azerbaijan’s oil and gas sector will be calculated as fixed amounts based on production volume, rather than as a%age of wholesale prices, Trend reports.
This issue has been reflected in the law on amendments to the Tax Code, approved by the President of the Republic of Azerbaijan, Ilham Aliyev.
Under the new system, the mineral extraction tax for crude oil is set at 12 manat per ton, while natural gas and condensate will be taxed at 15 manat per thousand cubic meters. The tax for ore minerals, including all types of metals, will continue to be calculated as 3% of their wholesale price.
Previously, taxes based on the value of extracted minerals created uncertainty for producers due to market price fluctuations, complicating revenue forecasting and reducing operational efficiency. The new volume-based approach aims to stabilize state budget revenue forecasts and incentivize efficient production.
Excise and mining taxes on other domestic goods, excluding oil and gas products, will continue to be determined based on quantity rather than value, with mining taxes contributing to production costs and excise taxes affecting selling prices.
Previously, the mineral extraction tax was determined as follows, depending on the type of minerals extracted from the earth, by applying it to their wholesale price:
|
Name of minerals subject to mineral extraction tax |
Mineral extraction tax rates (in%) |
|
Crude oil |
26 |
|
Natural gas |
20 |
|
Ore minerals: - all types of metals |
3 |
These amendments came into effect on January 1, 2026.