Azerbaijan suspends government audits of local businesses for at least two years


The Azerbaijani President signed the Law On Suspension of Audits of Business in Azerbaijan (Law).  Under the Law expect in few circumstances, starting from November 1, 2015 government audit of businesses in Azerbaijan is suspended for at least 2 years (until November 1, 2017).  This important measure is aimed at further improving the business environment and creating favorable investment climate in Azerbaijan.

There are few exceptions to this suspension requirement.  In particular, audit by the Ministry of Health of medical drugs and other similar substances in terms of their effect to health and security, audit by the Central Bank of Azerbaijan of banks and other credit organizations, illegal connection to electricity, gas and other utilities, and audit by the Ministry for Emergency Situations of potentially hazardous objects in terms of their compliance with the technical security requirements are not covered by the Law.

Tax audits are also not covered by the Law, however, on October 27, 2015 the Ministry of Taxes issued a statement that it (i) suspends on-site audit of business, whose turnover does not exceed AZN 120,000 and (ii) on-side audit of other businesses may be carried out with regard to only high risk entities – i.e., entities with respect to which there is high-risk of their tax evasion.

The Azerbaijani President initiated the suspension of government audits and the decision has been saluted and supported by majority of Azerbaijan’s population.  It is no doubt the initiate will further contribute to business environment in Azerbaijan.


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