en
az
ru
tr
How should VAT be calculated when selling honey at retail?
Is honey considered an agricultural product? Should VAT on the retail sale of honey be calculated based on the trade margin? The question concerns not the production of honey, but the situation where honey is purchased from a producer and then sold at retail in a store.
The State Tax Service under the Ministry of Economy of the Republic of Azerbaijan has stated that the production of the honey referred to in the inquiry is considered the production of agricultural products.
When agricultural products produced within the territory of the Republic of Azerbaijan are sold at retail, VAT is calculated based on the trade margin. For example, a retail business selling agricultural products purchases goods worth AZN 20,000 and sells them for AZN 25,000. In this case, the VAT amount is determined by applying the 18% VAT rate to the AZN 5,000 trade margin.
It was also reported that, from January 1, 2014, for a period of 13 years, income earned by persons engaged in beekeeping and the production of honey and beeswax is exempt from income and profit tax. Property used in this activity is exempt from property tax, while turnover from the sale of agricultural products produced by them is exempt from VAT. Revenue generated from the sale of their agricultural products is also excluded from the taxable base for simplified tax purposes.
Legal basis: Articles 13.2.60, 102.1.11, 106.1.14, 159, 164.1.18, 164.1.37, 199.9 and 218-1 of the Tax Code, as well as the “Classification of Product Types” approved by the decision of the Board of the State Statistics Committee of the Republic of Azerbaijan dated July 15, 2009.
Is honey considered an agricultural product? Should VAT on the retail sale of honey be calculated based on the trade margin? The question concerns not the production of honey, but the situation where honey is purchased from a producer and then sold at retail in a store.
The State Tax Service under the Ministry of Economy of the Republic of Azerbaijan has stated that the production of the honey referred to in the inquiry is considered the production of agricultural products.
When agricultural products produced within the territory of the Republic of Azerbaijan are sold at retail, VAT is calculated based on the trade margin. For example, a retail business selling agricultural products purchases goods worth AZN 20,000 and sells them for AZN 25,000. In this case, the VAT amount is determined by applying the 18% VAT rate to the AZN 5,000 trade margin.
It was also reported that, from January 1, 2014, for a period of 13 years, income earned by persons engaged in beekeeping and the production of honey and beeswax is exempt from income and profit tax. Property used in this activity is exempt from property tax, while turnover from the sale of agricultural products produced by them is exempt from VAT. Revenue generated from the sale of their agricultural products is also excluded from the taxable base for simplified tax purposes.
Legal basis: Articles 13.2.60, 102.1.11, 106.1.14, 159, 164.1.18, 164.1.37, 199.9 and 218-1 of the Tax Code, as well as the “Classification of Product Types” approved by the decision of the Board of the State Statistics Committee of the Republic of Azerbaijan dated July 15, 2009.