Azerbaijan, sited at the intersection of Eastern Europe and Western Asia, is a growing market for used car imports, especially from China. As the nation's economy flourishes, so does its automotive sector, with clear regulations in place for used car imports. This article provides an in-depth analysis of Azerbaijan’s regulations for importing used cars from China focusing on import policies, taxation, mandatory documents, and market insights.

Overview of Azerbaijan Automotive Market

Azerbaijan automotive market has grown due to economic progress that has necessitated increased demand for cheap transport options in the form of secondhand cars.

•     Used cars imports affectively fuel most of the market share with China being leading supplier.

•     Tastes of the local people seem to be inclined towards such brands as Toyota, Ford, Chevrolet, Mercedes, Kia, Hyundai, alongside others from China, which are gaining popularity among citizens.

•     The age distribution of imported used cars reveals a high percentage of vehicles over 10 years old, though recent policies aim to reduce this.

Import Policies for Used Cars from China

Importation regulations of Azerbaijan have been designed to ascertain quality and safety used cars that are brought into the country’s market:

•     Importation of both left-hand and right-hand drive automobiles is allowed but only left road drive vehicles are permitted onto the streets.

•     From 28 April 2023, there is a ban on importation of secondhand vehicles older than 10 years with all imported cars required to have ABS and at least one airbag.

•     Imported cars should conform to Euro 4 emission standards and above.

Taxation Policy for Used Car Imports

Specific duties and taxes provided by Azerbaijan for used car imports are all based on engine size and type of vehicle involved:

•     Import Duty: Levied based on the engine size in milliliters, with rates as follows:

     •     1500 ml and below: $0.7 per ml

     •     Above 1500 ml: $1.2 per ml

•     Excise Tax: In addition to import duty, an excise tax is applied according to the engine size category, with a progressive rate that increases with larger engine sizes. The excise tax brackets are as follows:

     •     2000 ml and below: 0.15 AZN per ml

     •     2001-3000 ml: 300 AZN plus an additional 1 AZN for every ml over 2001 ml

     •     3001-4000 ml: 1300 AZN plus an additional 2 AZN for every ml over 3001 ml

     •     Above 4000 ml: 3300 AZN plus an additional 4 AZN for every ml over 4001 ml

•     Value Added Tax (VAT): 18% VAT on CIF (Cost, Insurance, Freight) is applied on an imported vehicle implying that it accounts for quite a substantial share of total tax burden.

•     Electric Vehicle Incentives: To promote the adoption of electric vehicles, Azerbaijan has eliminated taxes on imported electric cars since January 1, 2019, offering a competitive edge to environmentally friendly vehicles.

Documentation Required for Used Car Imports

The import process requires a comprehensive set of documents to ensure compliance with regulations:

•     Original Bill of Lading (OBL) with details such as brand, model, VIN number, engine number, color, and car type.

•     Driver's license.

•     Social Security Card.

•     Customs authorization document.

•     Purchase or commercial invoice.

Market Dynamics and Future Outlook

Azerbaijan’s automotive market will undergo growth with an emphasis on sustainability and modernization:

•     The market will expand with Azerbaijan’s economy as well as its rising demand for personal cars.

•     There is a shift towards more stringent emission standards which means that future policies might favor green vehicles.

•     The regulatory framework may advance further based on new automotive technologies and meet global environmental standards.

Summary

In its bid to maintain a high quality of vehicles on the road and promote trade and economic development, Azerbaijan has instituted a regulatory framework designed for importing used cars from China. Knowledge about taxation rates, importation policies in respect to cars and related rules for documentation is of high importance to Chinese exporters and Azerbaijan Automotive Importers. As the market evolves, these regulations will play a pivotal role in shaping the future of Azerbaijan's automotive industry.

Please note that used car import tax rates and policies may change over time or be adjusted according to the latest regulations from the government. Therefore, it is advisable to confirm the most current tax information with relevant tax and customs authorities before importing.