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How much tax and social contributions do tailors have to pay?
According to Article 24.1.6-1 of the Tax Code, individuals specified in Article 218.4.4 of the Code must, before starting the activity provided for in Article 220.10, voluntarily obtain from the relevant executive authority a “Receipt for Payment of the Fixed Amount of Simplified Tax, Mandatory State Social Insurance and Mandatory Health Insurance Contributions” for the following month, quarter, half-year or year. Tailoring is one of the activities covered by this provision.
The “Receipt for Payment of the Fixed Amount of Simplified Tax, Mandatory State Social Insurance and Mandatory Health Insurance Contributions” is issued within no later than 2 working days upon a taxpayer’s written application, while applications submitted electronically are processed in real time.
Under the requirements of the legislation, where an agreement is concluded between the tax authority and the taxpayer in the form established by the relevant authority (institution), individuals specified in Article 218.4.4 receive the above-mentioned receipt electronically, without applying to the tax authority, within no later than 1 working day after fully paying the assessed tax, mandatory state social insurance and mandatory health insurance contributions.
Individuals engaged in tailoring activities independently (without employing hired workers) are simplified taxpayers under Article 220.10 of the Tax Code. For individuals independently engaged in the activities specified in this article, simplified tax is determined as a fixed monthly amount. For individuals engaged in tailoring activities independently, the fixed amount of simplified tax is 10 AZN per month.
For individuals engaged in the activities specified in Article 220.10 of the Tax Code, the monthly tax amount is determined by applying the following coefficients:
in Baku city (including villages and settlements) — 2.0;
in Ganja, Sumgayit and Khirdalan cities — 1.5;
in the settlements and villages of Absheron District (excluding Khirdalan city), and in Shirvan, Mingachevir, Nakhchivan, Lankaran, Yevlakh, Shaki and Naftalan cities — 1.0;
in other districts (cities), settlements and villages — 0.5.
Example:
Suppose an individual is engaged in tailoring activities independently in Baku. Their tax liability is calculated as follows:
10 × 2 (coefficient) = 20 AZN.
In Gadabay District, the amount would be:
10 × 0.5 (coefficient) = 5 AZN.
According to Article 14.5.1-1.2 of the Law “On Social Insurance,” individuals engaged in tailoring activities must pay mandatory state social insurance contributions equal to 5% of the minimum monthly wage.
Under Article 14.5.1-2 of the Law, the monthly social insurance contribution is determined by applying the following coefficients:
in Baku city (including villages and settlements) — 2.0;
in Absheron District and Ganja and Sumgayit cities — 1.5;
in other cities and districts — 1.0.
The mandatory health insurance contribution is calculated at 4% of the minimum wage.
Considering that the minimum wage in 2026 is 400 AZN, the payments for a tailor operating independently in Baku are calculated as follows:
Mandatory state social insurance contribution:
(400 × 5%) × 2 (coefficient) = 40 AZN;
Mandatory health insurance contribution:
400 × 4% = 16 AZN.
According to Article 24.1.6-1 of the Tax Code, individuals specified in Article 218.4.4 of the Code must, before starting the activity provided for in Article 220.10, voluntarily obtain from the relevant executive authority a “Receipt for Payment of the Fixed Amount of Simplified Tax, Mandatory State Social Insurance and Mandatory Health Insurance Contributions” for the following month, quarter, half-year or year. Tailoring is one of the activities covered by this provision.
The “Receipt for Payment of the Fixed Amount of Simplified Tax, Mandatory State Social Insurance and Mandatory Health Insurance Contributions” is issued within no later than 2 working days upon a taxpayer’s written application, while applications submitted electronically are processed in real time.
Under the requirements of the legislation, where an agreement is concluded between the tax authority and the taxpayer in the form established by the relevant authority (institution), individuals specified in Article 218.4.4 receive the above-mentioned receipt electronically, without applying to the tax authority, within no later than 1 working day after fully paying the assessed tax, mandatory state social insurance and mandatory health insurance contributions.
Individuals engaged in tailoring activities independently (without employing hired workers) are simplified taxpayers under Article 220.10 of the Tax Code. For individuals independently engaged in the activities specified in this article, simplified tax is determined as a fixed monthly amount. For individuals engaged in tailoring activities independently, the fixed amount of simplified tax is 10 AZN per month.
For individuals engaged in the activities specified in Article 220.10 of the Tax Code, the monthly tax amount is determined by applying the following coefficients:
in Baku city (including villages and settlements) — 2.0;
in Ganja, Sumgayit and Khirdalan cities — 1.5;
in the settlements and villages of Absheron District (excluding Khirdalan city), and in Shirvan, Mingachevir, Nakhchivan, Lankaran, Yevlakh, Shaki and Naftalan cities — 1.0;
in other districts (cities), settlements and villages — 0.5.
Example:
Suppose an individual is engaged in tailoring activities independently in Baku. Their tax liability is calculated as follows:
10 × 2 (coefficient) = 20 AZN.
In Gadabay District, the amount would be:
10 × 0.5 (coefficient) = 5 AZN.
According to Article 14.5.1-1.2 of the Law “On Social Insurance,” individuals engaged in tailoring activities must pay mandatory state social insurance contributions equal to 5% of the minimum monthly wage.
Under Article 14.5.1-2 of the Law, the monthly social insurance contribution is determined by applying the following coefficients:
in Baku city (including villages and settlements) — 2.0;
in Absheron District and Ganja and Sumgayit cities — 1.5;
in other cities and districts — 1.0.
The mandatory health insurance contribution is calculated at 4% of the minimum wage.
Considering that the minimum wage in 2026 is 400 AZN, the payments for a tailor operating independently in Baku are calculated as follows:
Mandatory state social insurance contribution:
(400 × 5%) × 2 (coefficient) = 40 AZN;
Mandatory health insurance contribution:
400 × 4% = 16 AZN.