Completion of the technical assistance project “Strengthening the Tax Dispute Resolution System of Azerbaijan”

The “Strengthening the Tax Dispute Resolution System of Azerbaijan” project was completed on 24 November 2021. The project, aiming to strengthen the legal and institutional framework for resolving tax disputes in the State Tax Service, increase the knowledge and skills of tax officials in dispute resolution, engage with stakeholders and educate the public on tax disputes, was implemented by a consortium led by Ecorys Netherlands.

The project, which kicked off in November 2020, contributes to the improvement of the tax dispute resolution system in Azerbaijan through measures to strengthen the legal, institutional and human capacity of State Tax Service to ensure the correct and timely resolution of issues of concern to taxpayers. It has advised on improving the relevant law, supported taxpayer communication about tax dispute options, and provided training to reinforce the capacities of the State Tax Service in tax dispute resolution.

The project consists of three main components:

• Strengthen the legal, organizational and institutional framework for resolving tax disputes. This includes a thorough assessment of the existing legal and institutional framework, recommendations for changes in the law, as well as recommendations for improving the capacity and processes of the Tax Ombudsman institution and its integration with the State Tax Service.
• Improve the capacity of the State Tax Service’s human resources to resolve tax disputes. This includes activities to improve staff ability to resolve disputes between tax officials, manage administrative appeals and raise their awareness about international best practice on the functions of the tax ombudsman. Within the framework of the project, study visits were organized for State Tax Service officials to get acquainted with the best practices in two European Union member states: Belgium and Portugal.
• Support taxpayers in informing them about the resolution of tax disputes system in Azerbaijan. This includes advising State Tax Service in establishing a communication and outreach strategy for resolving disputes, engaging stakeholders to obtain feedback, and develop products to support taxpayer education such as leaflets, brochures, articles, and videos.

The EU-funded project supported the State Tax Service in taking steps to improve the resolution of its tax disputes and to develop the processes necessary to increase the effectiveness of this function.

Moreover, the project supported the work of the Ministry of Economy’s institutions to improve the legal framework for tax dispute resolution, particularly in optimizing the function of the Tax Ombudsman over time. These recommendations, as well as training and study visits, provided a deeper understanding by State Tax Service staff of international best practices, and strengthened their capacity to optimize their functions and activities to resolve tax disputes in Azerbaijan. The project provided the State Tax Service with tools and products to increase the involvement of stakeholders and communication to resolve tax disputes, as well as to inform taxpayers about the existing system and changes.