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How is the amount of an operation subject to excise tax calculated?
How is the amount of an operation subject to excise tax calculated?
Tax experts comment on the calculation of the amount of operations subject to excise tax. According to Article 185.1 of the Tax Code, for petroleum products produced in the territory of the Republic of Azerbaijan, the amount of the taxable operation is the wholesale market price (excluding excise tax, road tax, and VAT) that the taxpayer receives or is to receive from the customer or any other person, including on a barter basis, which shall not be less than that amount. For other excise goods produced in the territory of the Republic of Azerbaijan, the taxable operation is considered to be the quantity of the goods produced.
Example 1. In August 2024, the taxpayer removed 10 tons of AI-92 gasoline and 3 tons of diesel fuel from the production premises. Let's calculate the excise amount the taxpayer must pay.
As is known, the prices for petroleum products are regulated by the Tariff (Price) Council of the Republic of Azerbaijan's Decision No. 4 dated July 26, 2022. According to this Decision, the producer price for AI-92 gasoline is 751.60 AZN per ton, and the excise tax is 42.5%. Similarly, the producer price for diesel fuel is 727.26 AZN per ton, with an excise tax of 18.3%.
The producer price of 1 ton of petroleum products established by the Tariff Council is accepted as the amount of the taxable operation. Thus, the excise tax is determined by multiplying the producer prices of these products by their volumes and the excise rate.
Therefore, taking the above into account, the solution to the problem will be as follows:
For AI-92 gasoline:
(751,60 x 10) x 42,5% = 3.192,9 AZN.
For diesel fuel:
(727,26 x 3) x 18,3% = 399,27 AZN;
3.192,9 + 399,27 = 3.592,17 AZN.
Therefore, the taxpayer must pay a total of 3,592.17 AZN in excise tax to the budget for the reporting period.
For other excise goods produced in the territory of the Republic of Azerbaijan, except for petroleum products, the taxable operation is considered to be the quantity of the goods produced. The excise goods that are accounted for as the quantity of the taxable operation include alcoholic spirits, beer, alcoholic beverages, energy drinks, tobacco products, cigarettes made from tobacco and their substitutes, single-use electronic cigarettes, tobacco for shisha and tobacco substitutes, as well as liquid for electronic cigarettes.
Example 2. The excise tax is charged for spirits, beer, all types of alcoholic beverages, energy drinks, and liquids for electronic cigarettes produced in the territory of the Republic of Azerbaijan per liter; for tobacco products, cigarettes made from tobacco and their substitutes, single-use electronic cigarettes - per unit; for tobacco for shisha and tobacco substitutes, other smoking tobaccos excluding production tobacco, “homogenized” or “reconstituted” tobaccos, chewing and snuff tobaccos - per kilogram.
According to Article 185.2 of the Tax Code, for imported goods (buses, passenger cars, motorcycles, yachts for recreation or sports and other floating vehicles intended for these purposes, as well as platinum, gold, jewelry made from it and other household items, excluding processed, sorted, framed, and solidified diamonds), the amount of the taxable operation is the customs value of the goods determined in accordance with the Customs Code of the Republic of Azerbaijan, but not less than the wholesale market price (excluding excise tax, road tax, and VAT).
For imported buses, passenger cars, motorcycles, yachts for recreation or sports, and other floating vehicles intended for these purposes, the taxable operation is determined by their engine capacity.
Example 3. A natural person engaged in the import of motor vehicles imported 2 “Mercedes” passenger cars from the Federal Republic of Germany to the Republic of Azerbaijan. One of the cars has an engine capacity of 1,800 cubic centimeters, and the other has 2,500 cubic centimeters. In this case, the engine capacity of both passenger cars (2,500 cubic centimeters and 1,800 cubic centimeters) will be taken as the basis for determining taxable operations.
For imported platinum, the taxable operation is per gram, for gold and jewelry made from it and other household items - per mill weight unit of gold, and for processed, sorted, framed, and solidified diamonds - by the carat of the diamond.
Example 4. The taxpayer imported 30 grams of platinum, 70 grams of gold of 750 fineness, and a 2.4-carat diamond from the Republic of Turkey. In this case, 30 grams of platinum, 70 grams of gold of 750 fineness, and a 2.4-carat diamond will be subject to excise tax.
Tax experts comment on the calculation of the amount of operations subject to excise tax. According to Article 185.1 of the Tax Code, for petroleum products produced in the territory of the Republic of Azerbaijan, the amount of the taxable operation is the wholesale market price (excluding excise tax, road tax, and VAT) that the taxpayer receives or is to receive from the customer or any other person, including on a barter basis, which shall not be less than that amount. For other excise goods produced in the territory of the Republic of Azerbaijan, the taxable operation is considered to be the quantity of the goods produced.
Example 1. In August 2024, the taxpayer removed 10 tons of AI-92 gasoline and 3 tons of diesel fuel from the production premises. Let's calculate the excise amount the taxpayer must pay.
As is known, the prices for petroleum products are regulated by the Tariff (Price) Council of the Republic of Azerbaijan's Decision No. 4 dated July 26, 2022. According to this Decision, the producer price for AI-92 gasoline is 751.60 AZN per ton, and the excise tax is 42.5%. Similarly, the producer price for diesel fuel is 727.26 AZN per ton, with an excise tax of 18.3%.
The producer price of 1 ton of petroleum products established by the Tariff Council is accepted as the amount of the taxable operation. Thus, the excise tax is determined by multiplying the producer prices of these products by their volumes and the excise rate.
Therefore, taking the above into account, the solution to the problem will be as follows:
For AI-92 gasoline:
(751,60 x 10) x 42,5% = 3.192,9 AZN.
For diesel fuel:
(727,26 x 3) x 18,3% = 399,27 AZN;
3.192,9 + 399,27 = 3.592,17 AZN.
Therefore, the taxpayer must pay a total of 3,592.17 AZN in excise tax to the budget for the reporting period.
For other excise goods produced in the territory of the Republic of Azerbaijan, except for petroleum products, the taxable operation is considered to be the quantity of the goods produced. The excise goods that are accounted for as the quantity of the taxable operation include alcoholic spirits, beer, alcoholic beverages, energy drinks, tobacco products, cigarettes made from tobacco and their substitutes, single-use electronic cigarettes, tobacco for shisha and tobacco substitutes, as well as liquid for electronic cigarettes.
Example 2. The excise tax is charged for spirits, beer, all types of alcoholic beverages, energy drinks, and liquids for electronic cigarettes produced in the territory of the Republic of Azerbaijan per liter; for tobacco products, cigarettes made from tobacco and their substitutes, single-use electronic cigarettes - per unit; for tobacco for shisha and tobacco substitutes, other smoking tobaccos excluding production tobacco, “homogenized” or “reconstituted” tobaccos, chewing and snuff tobaccos - per kilogram.
According to Article 185.2 of the Tax Code, for imported goods (buses, passenger cars, motorcycles, yachts for recreation or sports and other floating vehicles intended for these purposes, as well as platinum, gold, jewelry made from it and other household items, excluding processed, sorted, framed, and solidified diamonds), the amount of the taxable operation is the customs value of the goods determined in accordance with the Customs Code of the Republic of Azerbaijan, but not less than the wholesale market price (excluding excise tax, road tax, and VAT).
For imported buses, passenger cars, motorcycles, yachts for recreation or sports, and other floating vehicles intended for these purposes, the taxable operation is determined by their engine capacity.
Example 3. A natural person engaged in the import of motor vehicles imported 2 “Mercedes” passenger cars from the Federal Republic of Germany to the Republic of Azerbaijan. One of the cars has an engine capacity of 1,800 cubic centimeters, and the other has 2,500 cubic centimeters. In this case, the engine capacity of both passenger cars (2,500 cubic centimeters and 1,800 cubic centimeters) will be taken as the basis for determining taxable operations.
For imported platinum, the taxable operation is per gram, for gold and jewelry made from it and other household items - per mill weight unit of gold, and for processed, sorted, framed, and solidified diamonds - by the carat of the diamond.
Example 4. The taxpayer imported 30 grams of platinum, 70 grams of gold of 750 fineness, and a 2.4-carat diamond from the Republic of Turkey. In this case, 30 grams of platinum, 70 grams of gold of 750 fineness, and a 2.4-carat diamond will be subject to excise tax.