Who will benefit from recent changes in Azerbaijani Tax Code?
Baku, Azerbaijan, Dec. 11
By Jeyhun Alakbarov – Trend:
The latest changes in the Azerbaijani Tax Code envisage the expansion of the list of fixed tax payers, the Azerbaijani Ministry of Taxes told Trend.
Presently, this list includes domestic workers, nannies and carers, tutors, cleaners, gardeners, cooks, watchmen, as well as workers of art workshops.
From 2019, this list will also include hairdressers (a fixed tax rate of 20 manats), tailors (a fixed tax rate of 10 manats).
Switching to a fixed tax rate will greatly reduce the tax burden on this category of taxpayers despite the coefficients are applied to the fixed rates.
Thus, this ratio in Baku (Baku’s settlements and villages inclusive) will reach 2.0, in Ganja, Sumgait and Khirdalan - 1.5, in settlements and villages of the Absheron district (with the exception of Khirdalan city), in Shirvan, Mingachevir, Nakhchivan, Lankaran, Yevlakh, Sheki and Naftalan - 1.0; in other areas (cities) and settlements (villages) - 0.5.
For example, a hairdresser working in Baku will pay a tax of 40 manats (a fixed tax of 20 manats), seamstresses and waiters - 20 manats (a fixed tax of 10 manats).
According to this regulation, a hairdresser in Ganja will pay a tax of 30 manats (a fixed tax of 20 manats), hairdressers and waiters - 15 manats (a fixed tax of 10 manats).
Private entrepreneurs, as before, will pay a fixed tax after the changes come into force in connection with changes in the Code.
These innovations will exempt individuals who are engaged in private business from tax administration.
“The law has been adopted by the Azerbaijani parliament and after the law enters into force, private entrepreneurs will be informed about that,” the ministry added.
The new regulation is in fact very favorable for entrepreneurs, the ministry said.
"For example, if currently an individual entrepreneur working in Baku, who is a payer of a simplified tax, pays four percent of income [in the regions - two percent], then from 2019 he will pay a fixed tax regardless of income,” the ministry said. “This is carried out for the private entrepreneurs to be exempted from tax administration and the tax burden imposed on them to be reduced."
Moreover, individual entrepreneurs will be exempt from submitting a declaration to the tax bodies after each quarter.
(1.7 manats = $1 on Dec. 11)