A favorable tax environment is being formed in the capital market

On May 13, 2022, a number of changes were made to the Tax Code in order to create a favorable tax environment in the capital market.

According to the amendments, starting from February 1, 2023, only dividends, discounts and interest income paid on publicly offered and traded shares and bonds on the regulated market for 5 years will be exempt from tax. This change will contribute to the stimulation of the mass supply of securities and listing on the stock exchange.

Another change is to bring the discount and interest income tax return on bonds in line with international best practices and to take into account the number of days the bondholder owns the bond as the primary criterion. This change will stimulate investors' active participation in the capital market and expand the investor base by optimizing the tax burden on bond discounts and interest income. At the same time, interest income on bonds by legal entities is declared and paid in the gross profit, not at the source of payment.

These changes will significantly contribute to increasing market transparency and expanding the opportunities for investors to participate in the capital market against the background of the reduction of the over-the-counter market and the increase in the number of deals concluded on the stock exchange.

The Baku Stock Exchange is taking continuous measures to ensure the sustainable development of the securities market, revitalize the corporate securities segment, stimulate the listing of market participants and the stock exchange, as well as increase financial literacy in the capital market.

In this regard, we invite all issuers to take advantage of the above-mentioned tax benefits and to be listed on the Baku Stock Exchange. Issuers can benefit in this direction by applying to the Listing Advisory Program operating on the Baku Stock Exchange. Companies wishing to be financed through the issuance of securities and in need of support in this direction are fully supported and provided with free services during the issuance of securities under this program.