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Can I pay simplified tax at a 2% rate if my income does not exceed AZN 30,000?
We would like to inform you that the right to be a simplified tax payer does not depend solely on the amount of income. The taxpayer’s type of activity, the persons to whom the services are provided, and the volume of transactions carried out are also taken into consideration.
According to Article 218.5.10 of the Tax Code, persons who perform works and provide services, other than works and services provided to persons who are not registered with the tax authority as taxpayers (the general public), do not have the right to be simplified tax payers, subject to the exceptions provided for in that article.
At the same time, pursuant to Article 218.6.2 of the Tax Code, in certain cases, persons providing services both to the general public and to legal entities and individuals registered with the tax authority as taxpayers may have the right to be simplified tax payers. For this purpose, the volume of transactions that must be documented by electronic invoices during a quarter must not exceed 30 percent of the total volume of transactions related to the provision of services and performance of works.
As indicated in your inquiry, telecommunications equipment servicing is mainly provided to local companies registered as taxpayers. In this case, the fact that annual income does not exceed AZN 30,000 does not, by itself, create the right to become a simplified tax payer at a rate of 2 percent.
Therefore, if your services are provided only or mainly to other taxpayers, you do not have the right to be a simplified tax payer and must continue your activity as an income tax payer.
Legal basis: Articles 218.5.10 and 218.6.2 of the Tax Code.
We would like to inform you that the right to be a simplified tax payer does not depend solely on the amount of income. The taxpayer’s type of activity, the persons to whom the services are provided, and the volume of transactions carried out are also taken into consideration.
According to Article 218.5.10 of the Tax Code, persons who perform works and provide services, other than works and services provided to persons who are not registered with the tax authority as taxpayers (the general public), do not have the right to be simplified tax payers, subject to the exceptions provided for in that article.
At the same time, pursuant to Article 218.6.2 of the Tax Code, in certain cases, persons providing services both to the general public and to legal entities and individuals registered with the tax authority as taxpayers may have the right to be simplified tax payers. For this purpose, the volume of transactions that must be documented by electronic invoices during a quarter must not exceed 30 percent of the total volume of transactions related to the provision of services and performance of works.
As indicated in your inquiry, telecommunications equipment servicing is mainly provided to local companies registered as taxpayers. In this case, the fact that annual income does not exceed AZN 30,000 does not, by itself, create the right to become a simplified tax payer at a rate of 2 percent.
Therefore, if your services are provided only or mainly to other taxpayers, you do not have the right to be a simplified tax payer and must continue your activity as an income tax payer.
Legal basis: Articles 218.5.10 and 218.6.2 of the Tax Code.