Azerbaijan, Baku, November 22 / Trend, N. Ismailova /
Tax deviations committed under the lease of commercial and official facilities in Azerbaijan result in annual damage of 30 million to 40 million manat, Tax Minister Fazil Mammadov told journalists on Tuesday.
"Tax deviations committed under the lease of commercial and official facilities result in damage of at least 30 million to 40 million manat a year. According to preliminary investigation, such lease agreements were concluded mostly between close relatives," the Minister added.
Mammadov noted that such cases were revealed under the passport issue process underway in Azerbaijan and will be taken into account under the process of re-registration.
"Letter of authority, of course, can be formalized among close relatives, but the main thing here is that a contract is concluded among all persons, including close relatives. Another important thing is that these persons are registered at tax bodies as taxpayers," he noted.
As calculated preliminarily by the Ministry, the living area is given on lease in Baku at a price of 5 manat per square meter a month; similar coefficients are provided for the rest cities and regions of the country and are calculated on the basis of Cabinet of Ministers' decision.
"We would like to examine market prices to a broader extent. Such practice is also in effect in the EU, and there are a series of matters relating to legal provisions. Today, we conduct consultations with lawyers on this occasion," Mammadov noted.
As part of struggle with tax deviation under giving commercial and official facilities on lease, the Tax Ministry banned giving such facilities on lease on a letter of authority.
Analysis of the existing situation illustrates that 13,409 economic subjects out of 62,459 registered at the Tax Department of Baku are entities leasing facilities on a letter of authority. For the reasons of elimination of such situation, there were changed "The Methodical Instructions of Registration of Taxpayers at Tax Bodies", which regulate issues relating to lease relations amongst economic subjects.
Taxpayers, after having estimated the exact lease payment in a contract, are obliged to register the respective economic facility at a tax body. Currently, property lease income tax rate is 14 percent.
The official exchange rate on November 22 is 0.7865 AZN/USD.