Provisions on mandatory health insurance came into force from January first of this year due to amendments to the Law of the Republic of Azerbaijan “On health insurance”. Amendments have been made in the rules for calculation of insurance premiums. Employees working under labor contracts shall obtain mandatory insurance as of April 1, 2020.

Calculation of mandatory insurance premiums regarding employees working under the labor contract concluded in accordance with the Labor Code are as follows:

1. Income Insured person:

  • Up to AZN 8000 – 2 %
  • for the amount exceeding AZN 8000 AZN 160 + 0.5%

2. Employer:

  • Up to AZN 8000 – 2 %
  • for the amount exceeding AZN 8000 AZN 160 + 0.5%

Good news is 50% discount will be applied to the non-governmental and non-oil sector for the period beginning from April 1, 2020 up to January 1, 2021,  and mandatory health insurance premiums paid by the employee and the employer in the amount of 1% for the income earned up to AZN 8,000 for each party accordingly.

According to the guidelines on payment in accordance with the new amendments, Mandatory health insurance must be paid at the same time as salary payments, but not later than the 15th of following month. Then  mandatory health insurance return must be submitted to the tax authorities not later than the 20th of the month following the reporting quarter.

Moreover, mandatory health insurance charges should be calculated for each month by taxpayers engaged in the production and import of gasoline, diesel fuel and liquid gas at the rate of AZN 0.02 for per liter. Calculated amount must be paid no later than the 20th day of the month following the reporting month and mandatory health insurance return must be submitted to the tax authorities no later than the 20th of the month following the reporting month.

According to the Decree of the Cabinet of Ministers of the Republic of Azerbaijan No. 504 dated 27.12.2019, the enforcement of mandatory health insurance in Baku will start in October – December 2020.

This article was prepared as a general information by the attorneys of Baku Attorneys & Consultants (BAC), Azerbaijani law firm. BAC is a full service law firm based in Baku and it has a strong team of highly experienced attorneys and consultants, specialized in rendering various expert services to foreign and local clients in Azerbaijan. Please, feel free to reach us via www.batco.az.

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