Quick answer: excise tax in 2026
- Excise is an indirect tax applied to the production in Azerbaijan or import of specified goods.
- Excise goods include alcoholic drinks, beer, tobacco products, petroleum products, and other goods listed in the Tax Code.
- The tax base and rate vary by product and transaction; any excise-marking requirement must also be checked.
Detailed legal overview
Excise is an indirect tax applied to specific groups of goods. Its key difference from other taxes is timing: the liability arises not at the end of a year or quarter, but at the moment goods leave the production premises, clear customs, or the mandatory mark is obtained. The tax period is the calendar month.
Who pays excise?
Excise taxpayers are legal entities and individuals that produce or import excisable goods in the Republic of Azerbaijan.
Where goods are produced from the customer's raw materials (tolling), the payer must be identified separately
- As a general rule the contractor is the excise payer;
- Where the parties are interdependent residents, the owner of the goods (the customer) may be treated as the payer.
This distinction should be settled when the contract is drafted, because it determines who carries the tax burden and therefore affects pricing.
Object of taxation — when does the liability arise?
| Situation | Moment the liability arises |
|---|---|
| Excisable goods produced in Azerbaijan | Release of the goods from the production premises |
| Import of excisable goods | The goods leaving customs control |
| Certain goods (for example tobacco and electronic cigarette products) | Obtaining the mandatory mark |
The goods need not have been sold — release from the production premises is enough to create the liability.
Taxable base
The base is determined in one of three ways, depending on the goods
| Category of goods | Base |
|---|---|
| Certain goods | Quantity — litres, kilograms, units, etc. |
| Vehicles | Engine volume (cubic centimetres) |
| Certain imported goods | Customs value |
Tax period
The tax period for excise is the calendar month. Unlike annual or quarterly taxes, this requires monthly record-keeping and reporting discipline.
Excise rates
Excise rates differ by type of goods and there is no single rate
- For many domestically produced goods, rates are set out in the Tax Code;
- For certain imported goods, rates are determined by the relevant executive authority;
- For vehicles, excise is normally calculated on engine volume, and in some cases increasing coefficients apply.
Before calculating an amount for specific goods, the rate in force for that category should therefore be confirmed at source.
How is excise calculated?
Excise is generally calculated as the product of the rate and the taxable base
Taxable base × rate = excise amount
Which unit the base is measured in depends on the category of goods. The logic is shown below for three typical cases (the rate is shown as R, because it varies by category):
Goods taxed by quantity
- Base: quantity released, for example 5,000 litres
- Excise: 5,000 × R (rate per litre)
Vehicles
- Base: engine volume, for example 2,000 cubic centimetres
- Excise: 2,000 × R (rate per cubic centimetre)
- Where an increasing coefficient applies, the result is multiplied by that coefficient
Imported goods taxed on customs value
- Base: customs value
- Excise: customs value × R (rate expressed as a percentage)
Reductions and offsets
Where goods are spoiled, returned, or used as raw material, a reduction or offset may be available in accordance with the legislation. This matters in particular for enterprises that use excisable goods as an input in production — otherwise the same goods could carry the tax twice.
Payment procedure and deadlines
| Situation | When payment is due |
|---|---|
| Domestic production | For each reporting month, no later than the 20th of the following month; the return is filed within the same period |
| Where there is a tax debt | In certain cases excise must be paid at the time of the transaction |
| Import | Collected during customs clearance |
| Goods requiring a mandatory mark | Paid when the mark is obtained |
Frequently asked questions
I have not sold the goods yet. Does excise arise?
Yes. For domestic production the object of taxation is the release of goods from the production premises — not the moment of sale.
I produce goods from a customer's raw materials. Who pays excise?
As a general rule the contractor pays. However, where the parties are interdependent residents, the owner of the goods (the customer) may be treated as the payer.
When is the excise return filed?
For domestic production, for each reporting month no later than the 20th of the following month.
When do I pay excise on imports?
On import, excise is collected during customs clearance — it does not wait until the end of the month.
Are the rules different for tobacco products?
For certain goods, including tobacco and electronic cigarette products, obtaining the mandatory mark is the object of taxation and excise is paid when the mark is obtained.
What if I use excisable goods as raw material?
Where goods are used as raw material, a reduction or offset may be available in accordance with the legislation.
How is excise on a vehicle calculated?
Normally on engine volume. In some cases increasing coefficients apply.
Note: the schemes above show the calculation formula; the specific rates are set by category in the Tax Code or in acts of the relevant executive authority and should be verified before calculating.
Official sources
This article provides general information and does not replace advice based on the facts of a specific matter. Legislation may change; verify current rules before acting.
