Foreign Companies in Azerbaijan Cut Payments to State Budget within PSA Contracts

Oil and gas companies operating in Azerbaijan under the PSA (Production Sharing Agreements) contracts paid AZN 831 million to the state budget in 2019. This is stated in the report of the Accounts Chamber of the Republic of Azerbaijan.

As previously reported, in 2018, payments by oil producing companies for profit tax amounted to 1 billion 16.4 million manat. Thus, oil and gas companies reduced payments to the state budget of Azerbaijan for income tax by 18.2% in 2019.

“At the same time, the income tax payment plan from oil and gas companies in 2019 was completed by 93.8%,” the report noted.

Oil and gas companies operating in Azerbaijan under PSA contracts pay income tax 4 times a year: in January, April, July and October. They pay income tax on the basis of actual export prices for Azerbaijani oil.
According to the Accounting Chamber, the average oil price in 2019 was $ 66.9 per barrel (in 2018, $ 73.1 per barrel).