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trCan a person providing online training to individuals living abroad subject card-to-card payments to simplified tax?
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Can a person providing online training to individuals living abroad subject card-to-card payments to simplified tax?
We hereby inform you that providing online training to individuals residing abroad and receiving payments for such activity constitute entrepreneurial activity. Therefore, before commencing the activity, the individual must register as a taxpayer and obtain the relevant VÖEN (taxpayer identification number).
According to Article 33.4 of the Tax Code, an individual carrying out entrepreneurial activity without establishing a legal entity must register for tax purposes before the date of commencement of the activity. Tax registration is carried out free of charge, and the relevant application must be submitted to the tax authority.
Depending on the taxation system selected, an individual may be subject to simplified tax or income tax. If the simplified taxation system is selected, simplified tax is calculated at a rate of 2 percent on the total turnover, without deducting expenses, and paid to the state budget.
At the same time, when providing services to foreign persons, the restrictions established by legislation for maintaining the right to be a simplified taxpayer must be taken into account. Accordingly, during a quarter, the value of transactions that are required to be documented by an electronic invoice, including the value of services provided and work performed on the basis of an invoice for non-resident legal entities and non-resident individuals engaged in entrepreneurial activity, must not exceed 30 percent of the total volume of transactions.
If the activity is carried out as an income taxpayer, income tax is applied at a rate of 20 percent to the amount remaining after deducting expenses incurred in connection with generating that income.
In addition, Article 102.1.30-1 of the Tax Code provides a tax exemption for individuals providing services in the fields of science, education, culture and sports, whose annual income from such activities does not exceed AZN 45,000. If the training activity falls within these fields, 75 percent of the income derived from such activity may be exempt from income tax.
It should be noted that receiving payments through card-to-card transfers does not eliminate the obligation to tax the relevant income. Non-cash payment transactions carried out by a taxpayer must be conducted through accounts opened in accordance with Article 35 of the Tax Code.
Legal basis: Articles 33.4, 35, 102.1.30-1 and 220 of the Tax Code of the Republic of Azerbaijan.
We hereby inform you that providing online training to individuals residing abroad and receiving payments for such activity constitute entrepreneurial activity. Therefore, before commencing the activity, the individual must register as a taxpayer and obtain the relevant VÖEN (taxpayer identification number).
According to Article 33.4 of the Tax Code, an individual carrying out entrepreneurial activity without establishing a legal entity must register for tax purposes before the date of commencement of the activity. Tax registration is carried out free of charge, and the relevant application must be submitted to the tax authority.
Depending on the taxation system selected, an individual may be subject to simplified tax or income tax. If the simplified taxation system is selected, simplified tax is calculated at a rate of 2 percent on the total turnover, without deducting expenses, and paid to the state budget.
At the same time, when providing services to foreign persons, the restrictions established by legislation for maintaining the right to be a simplified taxpayer must be taken into account. Accordingly, during a quarter, the value of transactions that are required to be documented by an electronic invoice, including the value of services provided and work performed on the basis of an invoice for non-resident legal entities and non-resident individuals engaged in entrepreneurial activity, must not exceed 30 percent of the total volume of transactions.
If the activity is carried out as an income taxpayer, income tax is applied at a rate of 20 percent to the amount remaining after deducting expenses incurred in connection with generating that income.
In addition, Article 102.1.30-1 of the Tax Code provides a tax exemption for individuals providing services in the fields of science, education, culture and sports, whose annual income from such activities does not exceed AZN 45,000. If the training activity falls within these fields, 75 percent of the income derived from such activity may be exempt from income tax.
It should be noted that receiving payments through card-to-card transfers does not eliminate the obligation to tax the relevant income. Non-cash payment transactions carried out by a taxpayer must be conducted through accounts opened in accordance with Article 35 of the Tax Code.
Legal basis: Articles 33.4, 35, 102.1.30-1 and 220 of the Tax Code of the Republic of Azerbaijan.