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Is it necessary to install a POS-terminal in a retail trade facility?
Is it necessary to install a POS-terminal in a retail trade facility?
I am going to start a small business. My business will be a retail sale of decorative accessories. I want to know if it is necessary to install POS-terminal etc. devices in this business activity?
The State Tax Service under the Ministry of Economy said that the activity mentioned in the request is considered entrepreneurial activity and you should be registered for tax by submitting an application for tax registration to the tax authority (obtain a TIN) and pay tax on your income to the state budget.
Tax liabilities will consist of appropriate taxes (simplified tax or income tax (profit), VAT) in accordance with the taxation system selected in the application submitted for tax accounting and the resulting taxation objects.
Thus, if a simplified taxation system is chosen by a natural person (legal entity), a simplified tax of 2 percent is calculated and paid to the state budget from the income obtained from trade activity (from the total output) without deducting expenses.
If the mentioned activity is carried out as a payer of income (profit) tax, income tax is calculated and paid to the state budget at the rate of 20 percent from the remaining amount after deducting the expenses incurred in connection with obtaining that income.
It is brought to your attention that according to the articles 106.1.20 and 102.1.30 of the Tax Code, the income of micro-entrepreneurs with no less than 3 employees per month for the relevant year and who are not in debt for mandatory state social insurance contributions discount is applied to 75 percent of the income.
The average monthly number of salaried employees for the relevant year is determined by summing the number of salaried employees during the calendar year and dividing by 12.
If the taxpayer does not meet the conditions defined in this article for the purpose of applying the tax relief, and in the next accounting year, when he switches from a micro-entrepreneurial entity to another category of entrepreneurial entity, the legal entity shall be a micro-entrepreneur in the amount of 75 percent of the income tax calculated and paid according to the results of the results of the previous 3 calendar years. is deducted from the profit tax liability in the periods when it is a subject.
In the case of non-commodity transactions by the taxpayer, the tax relief specified by this article shall not be applied to income from non-commodity transactions.
The service informed that in case the taxpayer ceases his activity, in terms of the application of Articles 102.1.30 and 106.1.20 of the Tax Code, the average monthly number of employees is determined according to the period of actual activity.
The procedure for documenting the presentation of goods in the field of retail trade is regulated by the "Rule for keeping records of income and expenses for taxation purposes in the field of retail trade activity" approved by Decree No. 1341 of the President of the Republic of Azerbaijan dated April 19, 2017.
According to paragraph 4.1 of that Regulation, the presentation (sale) of goods in economic entities (objects) performing retail trade activities is carried out by applying control-cash register and POS-terminal. During the presentation (sale) of goods in such economic entities (objects), the buyer (consumer) is given a cash register receipt.
At the same time, according to Article 50.8.14 of the Tax Code, checks of the cash register must contain information on the type of check (sale, return, cancellation, advance (beh) payment, payment on short sale).
It was reported that according to Article 16.1.8 of the Tax Code, except for the following types of activities, retail trade, public catering activities, hotels and other hotel-type facilities, medical institutions and private medical practice real-time monitoring of payments for services provided by individuals, barbershops, beauty salons and cosmetology centers that meet the criteria determined by the body (institution) determined by the relevant executive power body and connected to the electronic information system of the body (institution) determined by the relevant executive power body - it is the tax payer's duty to carry out through the cash register:
16.1.8.1. sale of newspapers and magazines (when the share of such sales turnover in the total turnover exceeds 50 percent;
16.1.8.2. sale of agricultural products in markets, fairs and on mobile basis;
16.1.8.3. mobile, over-the-counter, vehicle and trailer retail activities in markets and other mass-market places;
16.1.8.4. sale of securities, lottery tickets, sports betting tickets and electronic sports betting tickets;
16.1.8.5. operation of electricity, gas, water, hot water supply and central heating system facilities;
16.1.8.6. hairdressing activity specified individually according to Article 220.10 of this Code.
According to the "Criteria for determining objects where POS-terminals will be installed" approved by the decision of the Cabinet of Ministers of the Republic of Azerbaijan No. 219 dated October 4, 2012, the list of objects where POS-terminals must be installed in the territory of the country was determined:
- all business subjects (objects) of VAT payers, regardless of their turnover and territory (from the date of registration of the taxpayer for VAT purposes);
- regardless of their turnover and territory, specialized in the sale of cars and furniture, sports and health complexes, healthcare facilities, leisure and entertainment facilities, hotels, wedding halls, gas stations, air, water, railway and road transport, carry out the sale of tickets for passenger transportation selling points and tourism companies (from the date of registration of the economic entity (object);
- all economic subjects (objects) of taxpayers whose average monthly turnover for the quarter exceeds 2,000 manats;
- transport vehicles that carry out passenger transportation with a passenger car (taxi) belonging to legal entities and individual entrepreneurs;
- state bodies that accept the payment of taxes and state fees and charges for the services (works) rendered.
It has been brought to attention that according to Article 58.7 of the Tax Code, except for the case of the implementation of trade activities (wholesale) provided for in Article 13.2.63 of this Code, violation of the rules of conducting monetary settlements with persons (population) who are not registered with the tax authority as taxpayers , i.e. without applying control-cash registers or strict reporting forms (without installing control-cash registers, without strict reporting forms in accordance with the forms established by the legislation or without entering the amount paid in cash), not registered with tax authorities or not meeting technical requirements, it including making money settlements with the population by using cash registers that present checks that do not meet the requirements listed in Article 50.8 of this Code, without using strict reporting forms defined by legislation or using strict reporting forms that do not conform to the forms approved in the established manner, Failure to install POS-terminals in facilities where POS-terminals are mandatory, and refusing to accept non-cash payments in facilities where POS-terminals are installed, or failing to issue a check that should be presented to the buyer, bank statements or other serious report forms that should be presented to the customer by banks' currency exchange departments, or to the taxpayer for giving an amount lower than the paid amount, for violating the rules of registration of cash settlements with the population when the use of control-cash registers is stopped:
- in the amount of 1,000 manats if such cases occur for the first time during the calendar year;
- in the amount of 3,000 manats if such cases are allowed for the second time during the calendar year;
- if such cases are committed three or more times during the calendar year, a financial sanction of 6,000 manats is applied.
I am going to start a small business. My business will be a retail sale of decorative accessories. I want to know if it is necessary to install POS-terminal etc. devices in this business activity?
The State Tax Service under the Ministry of Economy said that the activity mentioned in the request is considered entrepreneurial activity and you should be registered for tax by submitting an application for tax registration to the tax authority (obtain a TIN) and pay tax on your income to the state budget.
Tax liabilities will consist of appropriate taxes (simplified tax or income tax (profit), VAT) in accordance with the taxation system selected in the application submitted for tax accounting and the resulting taxation objects.
Thus, if a simplified taxation system is chosen by a natural person (legal entity), a simplified tax of 2 percent is calculated and paid to the state budget from the income obtained from trade activity (from the total output) without deducting expenses.
If the mentioned activity is carried out as a payer of income (profit) tax, income tax is calculated and paid to the state budget at the rate of 20 percent from the remaining amount after deducting the expenses incurred in connection with obtaining that income.
It is brought to your attention that according to the articles 106.1.20 and 102.1.30 of the Tax Code, the income of micro-entrepreneurs with no less than 3 employees per month for the relevant year and who are not in debt for mandatory state social insurance contributions discount is applied to 75 percent of the income.
The average monthly number of salaried employees for the relevant year is determined by summing the number of salaried employees during the calendar year and dividing by 12.
If the taxpayer does not meet the conditions defined in this article for the purpose of applying the tax relief, and in the next accounting year, when he switches from a micro-entrepreneurial entity to another category of entrepreneurial entity, the legal entity shall be a micro-entrepreneur in the amount of 75 percent of the income tax calculated and paid according to the results of the results of the previous 3 calendar years. is deducted from the profit tax liability in the periods when it is a subject.
In the case of non-commodity transactions by the taxpayer, the tax relief specified by this article shall not be applied to income from non-commodity transactions.
The service informed that in case the taxpayer ceases his activity, in terms of the application of Articles 102.1.30 and 106.1.20 of the Tax Code, the average monthly number of employees is determined according to the period of actual activity.
The procedure for documenting the presentation of goods in the field of retail trade is regulated by the "Rule for keeping records of income and expenses for taxation purposes in the field of retail trade activity" approved by Decree No. 1341 of the President of the Republic of Azerbaijan dated April 19, 2017.
According to paragraph 4.1 of that Regulation, the presentation (sale) of goods in economic entities (objects) performing retail trade activities is carried out by applying control-cash register and POS-terminal. During the presentation (sale) of goods in such economic entities (objects), the buyer (consumer) is given a cash register receipt.
At the same time, according to Article 50.8.14 of the Tax Code, checks of the cash register must contain information on the type of check (sale, return, cancellation, advance (beh) payment, payment on short sale).
It was reported that according to Article 16.1.8 of the Tax Code, except for the following types of activities, retail trade, public catering activities, hotels and other hotel-type facilities, medical institutions and private medical practice real-time monitoring of payments for services provided by individuals, barbershops, beauty salons and cosmetology centers that meet the criteria determined by the body (institution) determined by the relevant executive power body and connected to the electronic information system of the body (institution) determined by the relevant executive power body - it is the tax payer's duty to carry out through the cash register:
16.1.8.1. sale of newspapers and magazines (when the share of such sales turnover in the total turnover exceeds 50 percent;
16.1.8.2. sale of agricultural products in markets, fairs and on mobile basis;
16.1.8.3. mobile, over-the-counter, vehicle and trailer retail activities in markets and other mass-market places;
16.1.8.4. sale of securities, lottery tickets, sports betting tickets and electronic sports betting tickets;
16.1.8.5. operation of electricity, gas, water, hot water supply and central heating system facilities;
16.1.8.6. hairdressing activity specified individually according to Article 220.10 of this Code.
According to the "Criteria for determining objects where POS-terminals will be installed" approved by the decision of the Cabinet of Ministers of the Republic of Azerbaijan No. 219 dated October 4, 2012, the list of objects where POS-terminals must be installed in the territory of the country was determined:
- all business subjects (objects) of VAT payers, regardless of their turnover and territory (from the date of registration of the taxpayer for VAT purposes);
- regardless of their turnover and territory, specialized in the sale of cars and furniture, sports and health complexes, healthcare facilities, leisure and entertainment facilities, hotels, wedding halls, gas stations, air, water, railway and road transport, carry out the sale of tickets for passenger transportation selling points and tourism companies (from the date of registration of the economic entity (object);
- all economic subjects (objects) of taxpayers whose average monthly turnover for the quarter exceeds 2,000 manats;
- transport vehicles that carry out passenger transportation with a passenger car (taxi) belonging to legal entities and individual entrepreneurs;
- state bodies that accept the payment of taxes and state fees and charges for the services (works) rendered.
It has been brought to attention that according to Article 58.7 of the Tax Code, except for the case of the implementation of trade activities (wholesale) provided for in Article 13.2.63 of this Code, violation of the rules of conducting monetary settlements with persons (population) who are not registered with the tax authority as taxpayers , i.e. without applying control-cash registers or strict reporting forms (without installing control-cash registers, without strict reporting forms in accordance with the forms established by the legislation or without entering the amount paid in cash), not registered with tax authorities or not meeting technical requirements, it including making money settlements with the population by using cash registers that present checks that do not meet the requirements listed in Article 50.8 of this Code, without using strict reporting forms defined by legislation or using strict reporting forms that do not conform to the forms approved in the established manner, Failure to install POS-terminals in facilities where POS-terminals are mandatory, and refusing to accept non-cash payments in facilities where POS-terminals are installed, or failing to issue a check that should be presented to the buyer, bank statements or other serious report forms that should be presented to the customer by banks' currency exchange departments, or to the taxpayer for giving an amount lower than the paid amount, for violating the rules of registration of cash settlements with the population when the use of control-cash registers is stopped:
- in the amount of 1,000 manats if such cases occur for the first time during the calendar year;
- in the amount of 3,000 manats if such cases are allowed for the second time during the calendar year;
- if such cases are committed three or more times during the calendar year, a financial sanction of 6,000 manats is applied.