The purpose of the research is to study the methods of organizing interbudgetary relations as an important element of financial support, the principles for determining sources of income for different levels of budgets and transferring expenditure obligations from one level of the budget system to another.

The methodology of the research - to solve the tasks set, the following methods were used: logical generalization; structural-functional analysis; methods of system-integrated analysis and evaluation.

The practical importance of the research is that the proposed analytical framework for minimizing mutual financial flows between the central and local budgets, supporting various measures to meet their needs, will increase the effectiveness of the use of regulatory taxes.

Results of the study – the results obtained can be used to develop proposals and recommendations for minimizing mutual financial flows between the central and local budgets within the framework of interbudgetary relations of the country's financial resources.

The originality and scientific novelty of the research - the article discusses the transfer of expenditure obliga-tions of various levels of the budgetary system of the Republic of Azerbaijan, the introduction of the mechanism of interbudgetary transfers in the form of subsidies and subsidies and changes in the tax system, methods of organizing interbudgetary relations. The principles of division of tax powers between the state and municipal levels of government are proposed. including measures to rationalize the mechanism for balancing the budgetary provision of the regions, increase their own tax base, improve property taxes, tax regulation of the regions and increase powers. regional budgets in the formation of tax and non-tax revenues.

Keywords: regional development, interbudgetary relations, budgetary system, budget levels, expenditure commitments, sources of income, financial support, finan-cial flows, tax potential.