Azerbaijan, Baku, April 14 (Trend, I. Khalilova)
The 2012 amendments and supplements to the Tax Code of Azerbaijan do not envision decrease of the existing tax rates, Minister of Taxes Fazil Mamedov told a press conference Thursday.
"There is currently no need in this because, as compared to the tax rates in Eastern Europe, tax rates in Azerbaijan are optimal and rather simplified", Mamedov said.
According to him, potential changes of the existing tax legal provisions may relate to measures on stimulation of non-cash payments, launch of electronic audit, electronic registration of physical persons involved in entrepreneurial activities, etc.
Last time the tax legal provisions of Azerbaijan were changed in 2010.
The rates of several kinds of direct taxes have been decreased since January 1, 2010. Profit tax rate has decreased from 22 percent to 20 percent; the maximum income tax on employees has been decreased from 35 percent to 30 percent and on physical persons engaged in entrepreneurship not as a legal entity - from 35 percent to 20 percent.
The system of simplified tax has also been changed. While prior to 2010 the simplified tax covered physical persons and legal entities with quarterly turnover not exceeding 22,500 manat, the 2010 change envisions that simplified tax covers legal entities with annual turnover of up to 150,000 manat and physical persons with annual turnover of up to 90,000 manat. If physical persons and legal entities exceed this limit they will be obliged to pass registration at the Ministry of Taxes as Value Added Tax (VAT)-payers.
Preschool institutions operational on paid basis have also become VAT-exempt since 2010. An innovation in the sphere of tax administration is the launch of submission of invoices in electronic form. As a result, Azerbaijan has become the first country in Eastern Europe and the CIS using electronic invoices. VAT rate, despite proposal of decreasing it by one percent this year, is likely to remain unchanged, 18 percent next year as well.
In 2010, the tax legal provisions were supplied with a total of 46 amendments in the following four directions: improvement of the rights of and protection of the interests of taxpayers (19), improvement of the tax administration (16), of the tax control (7), and changes of editorial nature (4).