In accordance with the changes and supplements to the Tax Code in 2007 it is planned to expand the base of simplified taxation system. Trend has been informed at the government that staring from next year the public catering can be included in the list of taxpayers of simplified tax. The alternation of this status is not proposed, even if the quartile turnover exceeds 123,750m manats. In accordance with the simplified taxation system, the taxpayer can be registered for VAT in case the three-month turnover exceeds the figure.
This innovation will be applied in connection with evasion from payment of VAT, which is frequently met in the public catering system. In 2007 the quartile turnover ceiling will be left without changes. The tax rates in Baku comprise 4%, while in other cities and regions, as well as Nakhchivan Autonomous Republic, 2%.
Legal entities, that pay simplified tax have been released from payment of VAT, income tax, property tax, whilst the physical entities involved in business activities without establishment of a legal entity, are released from payment of incomes taxes and VAT.