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A New Tax to Be Imposed on Fruit Sellers – Amendments to the Code
Significant changes are expected in the taxation of agriculture in Azerbaijan.
According to the proposed amendments to the Tax Code, a 2% tax will be withheld from those purchasing agricultural products from farmers.
According to AZE Finance, a new taxation mechanism is being proposed for the purchase of agricultural products from individuals based on purchase records.
Under the expected amendments, one of the key criteria will be whether the seller is registered in the Electronic Agricultural Information System (EKTİS).
If the seller, for example, a fruit vendor, is registered in EKTİS, the relevant transaction will be exempt from tax. However, if the seller is not registered in the system, a 2% withholding tax will be applied at the time of purchase.
For example, if agricultural products worth AZN 10,000 are purchased from an individual who is not registered in EKTİS, the tax withheld at source will amount to AZN 200.
It should be noted that this change is significant for companies engaged in agricultural procurement, processing enterprises, and individuals selling their products to these businesses. On the one hand, the rule encourages farmers to register electronically; on the other hand, it introduces taxation on sales made by unregistered individuals.
However, which party ultimately bears the economic burden of the tax may depend on the purchase price and the agreement between the parties.
Significant changes are expected in the taxation of agriculture in Azerbaijan.
According to the proposed amendments to the Tax Code, a 2% tax will be withheld from those purchasing agricultural products from farmers.
According to AZE Finance, a new taxation mechanism is being proposed for the purchase of agricultural products from individuals based on purchase records.
Under the expected amendments, one of the key criteria will be whether the seller is registered in the Electronic Agricultural Information System (EKTİS).
If the seller, for example, a fruit vendor, is registered in EKTİS, the relevant transaction will be exempt from tax. However, if the seller is not registered in the system, a 2% withholding tax will be applied at the time of purchase.
For example, if agricultural products worth AZN 10,000 are purchased from an individual who is not registered in EKTİS, the tax withheld at source will amount to AZN 200.
It should be noted that this change is significant for companies engaged in agricultural procurement, processing enterprises, and individuals selling their products to these businesses. On the one hand, the rule encourages farmers to register electronically; on the other hand, it introduces taxation on sales made by unregistered individuals.
However, which party ultimately bears the economic burden of the tax may depend on the purchase price and the agreement between the parties.