Azerbaijan unifies indirect taxation system in accordance with EU requirements

Photo: Azerbaijan unifies indirect taxation system in accordance with EU requirements / Economy news

Baku, Azerbaijan, Aug.28

By Zulfiyya Kurbanova - Trend:

Unification of the current tax legislation of Azerbaijan and the European Union (EU) is one of the main conditions for strengthening economic cooperation with the EU, Chief of the Tax Policy and Strategic Studies of the Ministry of Taxes Natig Shirinov said in an interview with Taxes (vergiler.az) newspaper.

He said that it is one of the priorities to accelerate the European integration of Azerbaijan.

"Resolving of this issue is provided in the strategic plan for the development of the tax system approved by the ministry. Preparations are being implemented in this area. Initially, in connection with the unification of the legislation the basic requirements for the seven directives in the EU system of indirect taxes have been analyzed and determined," he said.

Harmonization in the field of indirect taxes affects the mutual trade. Speaking about the direct taxes, Shirinov noted that the types of taxes included in this group do not need to be harmonized. Because direct taxes as opposed to indirect ones do not have a direct impact on the free movement of capital, goods and services provided. Direct taxes are determined in accordance with the domestic economic policies of each country, the head of government noted.

One of the main requirements of the EU was associated with the release of educational services from the payment of value added tax (VAT), Shirinov said.

"In accordance with the requirements of the EU directive paid education in the country is free from VAT since January 1, 2013," he said, adding that currently analysis and discussion are being held to identify opportunities for the application of other EU requirements in connection with the differentiation of VAT rates coverage of the excise tax, and with operations that require VAT.

In Azerbaijan, the excise tax is levied on alcohol, tobacco, and petroleum products. To support national production in 2007 an excise tax on motor vehicles was also introduced.

In recent years Azerbaijan has also carried out the transformation to introduce electronic payment system with the use of international experience in order to create the advanced National Payment System, Shirinov added.

"In this regard, the Government prepared and submitted project proposals to the relevant legislation, providing for limitations of cash and promotion of non-cash payments in the country. Along with this, in order to provide technical support for a more advanced legal framework for non-cash calculations promotion, negotiations with the World Bank representative in Azerbaijan are being carried out," he said.

On July 1, 2014 the number of POS-terminals in the country amounted to 52,413 units, of which 37,079 units are installed in Baku, while 15,334 are in other cities and regions. The number of POS-terminals as compared to January-June 2013 increased by 15,247 units, or 41 by percent.

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