In what circumstances is it possible to make a cash payment?

In what circumstances is it possible to make a cash payment?



An entrepreneur who is a VAT payer has made a cash payment of 10,000 manat per month for cargo transportation services to another individual who is also a VAT payer (according to Article 3.3 of the Law on Cashless Settlements). Is this transaction correct?

The State Tax Service under the Ministry of Economy has stated that, according to Article 3.2 of the Law on Cashless Settlements, cashless payments between two parties who are both tax payers can only be made in the form specified in Article 3.1.1 of this Law.

According to Article 3.1.1 of the Law on Cashless Settlements, a cashless settlement refers to transactions where funds are transferred from one person’s bank account to another’s (including using payment instruments (payment cards, payment orders, etc.) and payment means (mobile phone devices, computers, and other equipment)).

Additionally, it is noted that according to Article 58.7-1 of the Tax Code, if the requirements of the Law on Cashless Settlements are violated, tax payers are subject to financial penalties. For the first violation of the Law within a calendar year, a penalty of 10% of the total amount of the transaction is applied; for a second violation, 20%; and for three or more violations, 40%.

For more detailed information regarding your inquiry, you may contact the Call Center (195-1) or the tax payer service centers.

Reference: Article 58.7-1 of the Tax Code and the Law of the Republic of Azerbaijan on Cashless Settlements.