VAT payers’ registration system to be toughened from 2006

Business Materials 22 December 2005 11:26 (UTC +04:00)

At the recommendation of the International Monetary Fund (IMF) some changes were injected in the Tax Code to improve the VAT administration system, Akif Mustafayev, the head of the Central Tax Policy and Strategic Researches of the Ministry of Taxes told a news conference on Wednesday. The IMF rendered technical assistance to the Taxes Ministry in order to implement the work in this direction in line with the international practice.

In compliance with the IMF�s recommendations, a control over voluntary registration of VAT payers will be toughened from 2006. So far, the taxpayers were included in the VAT registration list immediately after a relevant appeal to the tax bodies. In compliance with the changes to the Tax Code, the taxpayer will be inquired additional information on financial opportunities, data on goods and ways to acquire them. In general with in 30 days there will be held researches and after the registration of the applicant by a VAT payer will be considered.

As part of strengthening of a control, the taxpayers presenting invoices not being a VAT payer, will be imposed financial sanctions in the amount of 100% of unpaid tax. The sanctions will be imposed on those who function without registration at the tax bodies as a VAT payer, whereas the world practice offers sanctions in the amount of 3-fold unpaid tax for such violations.