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Which taxpayers will be considered as VAT payers compulsorily?
Which taxpayers will be considered as VAT payers compulsorily?
According to Article 154.7 of the Tax Code, individuals specified in Article 33.8-1 of this Code (excluding permanent establishments as provided in Article 19 of this Code) are considered VAT payers. So, which taxpayers are required to register for VAT? Tax expert Anar Bayramov provides clarification.
According to Article 33.8-1 of the Tax Code, a non-resident who conducts electronic commerce through internet information resources and earns income from providing goods and services to residents (excluding permanent establishments as provided in Article 19 of this Code) is subject to electronic tax registration, re-registration, and deregistration, as well as registration as a VAT payer, submission of VAT returns, and VAT payment procedures determined by the relevant executive authority.
It should be noted that the Cabinet of Ministers' decision No. 387, dated October 30, 2023, approved the "Procedure for Electronic Tax Registration, Re-registration, and Deregistration of Non-Residents Conducting Electronic Commerce through Internet Information Resources."
Example 1: If the company "TikTok" establishes a virtual representation in our country, it must be registered as a VAT payer. Such taxpayers cannot be simplified tax payers.
So, for which taxpayers has the possibility of VAT registration been relaxed?
Until the recent changes, Article 156.1-1 of the Tax Code had specific requirements for individuals conducting passenger and freight transportation (including taxis) with vehicles owned or used by them, or who carry out such transportation through other individuals based on a contract. For example, such taxpayers were required to receive and pay the value of services and goods (works and services) non-cash. Another requirement was that revenues from services provided to other taxpayers and the expenses incurred in obtaining those revenues needed to be documented with electronic invoices.
As a result of recent changes, according to Article 156.1-1 of the Tax Code, individuals who receive the value of services non-cash as stipulated in Article 218.4.1 of this Code (excluding taxi operators) can benefit from the rights established in Article 156 of this Code. Additionally, the requirements for such taxpayers have been abolished.
Example 2: Individuals who provide passenger transportation (excluding international passenger transportation) in the territory of Azerbaijan using vehicles owned or used by them and receive payment for these services non-cash can voluntarily register as VAT payers starting from January 1, 2024.
According to Article 154.7 of the Tax Code, individuals specified in Article 33.8-1 of this Code (excluding permanent establishments as provided in Article 19 of this Code) are considered VAT payers. So, which taxpayers are required to register for VAT? Tax expert Anar Bayramov provides clarification.
According to Article 33.8-1 of the Tax Code, a non-resident who conducts electronic commerce through internet information resources and earns income from providing goods and services to residents (excluding permanent establishments as provided in Article 19 of this Code) is subject to electronic tax registration, re-registration, and deregistration, as well as registration as a VAT payer, submission of VAT returns, and VAT payment procedures determined by the relevant executive authority.
It should be noted that the Cabinet of Ministers' decision No. 387, dated October 30, 2023, approved the "Procedure for Electronic Tax Registration, Re-registration, and Deregistration of Non-Residents Conducting Electronic Commerce through Internet Information Resources."
Example 1: If the company "TikTok" establishes a virtual representation in our country, it must be registered as a VAT payer. Such taxpayers cannot be simplified tax payers.
So, for which taxpayers has the possibility of VAT registration been relaxed?
Until the recent changes, Article 156.1-1 of the Tax Code had specific requirements for individuals conducting passenger and freight transportation (including taxis) with vehicles owned or used by them, or who carry out such transportation through other individuals based on a contract. For example, such taxpayers were required to receive and pay the value of services and goods (works and services) non-cash. Another requirement was that revenues from services provided to other taxpayers and the expenses incurred in obtaining those revenues needed to be documented with electronic invoices.
As a result of recent changes, according to Article 156.1-1 of the Tax Code, individuals who receive the value of services non-cash as stipulated in Article 218.4.1 of this Code (excluding taxi operators) can benefit from the rights established in Article 156 of this Code. Additionally, the requirements for such taxpayers have been abolished.
Example 2: Individuals who provide passenger transportation (excluding international passenger transportation) in the territory of Azerbaijan using vehicles owned or used by them and receive payment for these services non-cash can voluntarily register as VAT payers starting from January 1, 2024.