New Tax Incentives for Railway Freight Transportation Starting from 2025

According to the Law of the Republic of Azerbaijan dated December 16, 2024, which introduces amendments to the Tax Code, new tax incentives (exemptions) will be implemented in the field of transportation.

From January 1, 2025, foreign motor vehicles will be exempt from paying road tax for a period of two years in the following cases:

Railway Freight Transportation: If goods are transferred from railway platforms to foreign motor vehicles within the territory of Azerbaijan at the last railway station designated by the Cabinet of Ministers and are then transported to another country through the nearest customs checkpoint.

Freight Transport: If goods are transported on foreign motor vehicles from another country's territory to Azerbaijan through the nearest customs checkpoint to the first railway station designated by the Cabinet of Ministers.

The Cabinet of Ministers has been tasked with approving the regulations for implementing this law.

These tax incentives aim to enhance the development of international transport corridors passing through the country's territory and ensure their competitiveness compared to alternative routes. The exemptions will encourage integration between motor vehicle and railway transportation, promote trade relations, and facilitate more efficient and faster freight transport within the sector.

Previously, under the Tax Code, foreign motor vehicles entering, transiting through, or exiting Azerbaijan were subject to road taxes. The rates were determined based on the number of axles, the duration of stay within the country's territory, and the total weight of the vehicle, including cargo.