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The procedure for specifying the excise tax turnover
The procedure for specifying the excise tax turnover
According to Article 186-1.1 of the Tax Code, if tax has been calculated by the manufacturer of excise goods due to the release of goods outside the limits of the production building or the purchase of a mandatory mark, the return of the calculated excise goods when the goods are damaged or expired or returned for other reasons is reduced during
Tax expert Ismayil Bagirov explains this requirement of the legislation on the basis of examples.
Example 1: A taxpayer produced 5,000 liters of beer in January 2024 and shipped all of this product outside the production premises. Therefore, an excise tax of 2,000 manats was calculated:
5,000 x 0.4 = 2,000 manats.
However, in May 2024, due to certain reasons, 2,000 liters of that beer were returned. In this case, the payer will reduce the excise tax by 800 manats in the May excise declaration:
2000 x 0.4 = 800 manats.
Article 186-1.2 of the Tax Code states that after the producer of excise goods has released the goods to his own facilities outside the limits of the production building, when those goods are returned due to damage or expiry, the taxpayer shall apply to the tax authority for the actuation of those goods and reduction of the calculated tax. applies. Within 5 working days from the date of application, those goods are registered with the participation of the responsible persons of the tax authority.
Example 2: Deteriorated goods were returned in October 2023 in the off-premises warehouse of a manufacturer of excise goods. On the 11th of the same month, the taxpayer applies to the tax authority for the declaration of these goods and reduction of the calculated tax. With the participation of the responsible persons of the tax authority, those goods are registered within 5 working days from the date of application, i.e. from October 11.
According to Article 186-1.3 of the Tax Code, the reduction of excise duty due to damaged or expired products is carried out in the reporting period when the corresponding act is drawn up, and the drawn up act is submitted to the tax authority when the tax report is submitted. When damaged or expired products are destroyed, the excise duty replaced during the production of those products is calculated into the budget
Example 3: The taxpayer purchased 5,000 liters of potable alcohol based on an electronic invoice in July 2024 and produced 12,000 units of 0.5-liter vodka from that alcohol during the reporting period and released it outside the production premises. Also, due to the fact that part of the vodka was spoiled, a corresponding act was drawn up in July and that product was destroyed. The act drawn up during the filing of the tax report was submitted to the tax authority. In this case, let's determine the tax liability of the taxpayer on excise duty.
The amount of excise duty paid by the taxpayer for alcohol purchased is 24,000 manats:
5,000 x 4.8 = 24,000 manats.
First, the volume (quantity) of the produced excise goods is determined:
12,000 x 0.5 = 6,000 liters.
By multiplying that amount by the rate of excise duty, we find the amount of excise duty to be calculated:
6,000 x 4.8 = 28,800 manats.
Let's say that 1,000 manat excise tax was replaced for the destroyed goods. In this case, taking into account the difference between the amount of excise tax paid by the taxpayer when purchasing the goods and the amount of excise tax calculated by him in the reporting month and the amount of excise duty replaced by 1,000 manats for the destroyed goods, the excise tax liability of the taxpayer will be 5,800 manats:
28,800 – (24,000 – 1,000) = 5,800 manats.
According to Article 186-1.4 of the Tax Code, if a legal entity that is a producer of excise goods specified in Articles 190.1.1 - 190.1.3 of this Code is liquidated or the activity of an individual entrepreneur is terminated, if an unactivated mandatory mark remains in their possession, the taxpayer, when purchasing those marks has the right to recover the paid excise amounts.
Example 4: MMC, which manufactures tobacco products, bought 300,000 mandatory signs in January 2024. In October, MMC was liquidated and 100,000 unactivated mandatory tokens remained in its possession. In this case, the payer will be able to recover the excise duty paid for those 100,000 non-activated mandatory signs.
Article 186-1.5 of the Tax Code states that in the event of an increase in excise rates, a taxpayer who paid tax at a lower rate when purchasing mandatory signs shall pay the excise amount calculated based on the increased rate and the excise amount calculated based on the previous rate for non-activated mandatory signs in his possession on the date of the effective date of the change. he must pay the difference to the state budget no later than the 20th of the following month by reflecting the month in which the change came into effect in the excise declaration, and in relation to import operations, by reflecting in the customs declaration the time when the goods marked with those mandatory signs were imported.
Example 5: "AA" MMC bought 500,000 mandatory signs for tobacco cigarettes in January 2024 and paid 22,750 manats of excise tax for it. There was an increase in excise duty rates in July. As of the date of the increase, the payer had 100,000 unactivated mandatory signs in his possession, and therefore MMC calculated an additional excise amount of 5,000 manats. The payer shall indicate the difference in the July excise declaration and pay it to the state budget no later than August 20.
Example 6: In January 2024, the tobacco products factory received a mandatory mark for 400,000 different types of cigarillos worth 18,200 manats and produced 30,000 different types of cigarillos during the year. He took 20,000 of these goods outside the limits of the production building, and kept the rest in the building. Due to changes in the Tax Code in September, there was an increase in excise rates. As a result, there was a difference of 9,000 manat due to non-activated mandatory signs. In the meantime, the enterprise must pay the difference of 9,000 manats to the state budget no later than October 20 by reflecting it in the September excise declaration.
According to Article 186-1.6 of the Tax Code, in the event of a reduction in excise rates, the taxpayer who paid tax at a higher rate when purchasing mandatory signs shall pay the difference between the excise amount calculated based on the reduced rate and the excise amount calculated based on the previous rate for the non-activated mandatory signs in his possession on the date the change came into force. reduce the excise liability by reflecting in the excise declaration of the month in which the change came into effect, and in relation to import operations, by reflecting in the customs declaration drawn up for the import of goods marked with those mandatory signs.
Example 7: In January 2024, the enterprise imported 500 liters of liquid for electronic cigarettes and paid 50,000 manat excise tax on it. There was a decrease in excise rates in August, resulting in a difference of 5,000 manats. At this time, the enterprise reduces its excise liability by reflecting that 5,000 manat reduction in the customs declaration prepared for the import of goods marked with mandatory signs.
Example 8: In January 2024, the tobacco products factory received a mandatory mark for 400,000 different types of cigarillos worth 18,200 manats and produced 300,000 different types of products during the year, and 200,000 of these goods were sold outside the production premises. took out. Due to changes in the Tax Code in October, there was a decrease in excise duty rates. As a result, there was a difference of 11,000 manats due to non-activated mandatory signs. At the same time, the enterprise reduces the excise liability by reflecting the difference of 11,000 manats in the excise declaration of September.
According to Article 186-1.1 of the Tax Code, if tax has been calculated by the manufacturer of excise goods due to the release of goods outside the limits of the production building or the purchase of a mandatory mark, the return of the calculated excise goods when the goods are damaged or expired or returned for other reasons is reduced during
Tax expert Ismayil Bagirov explains this requirement of the legislation on the basis of examples.
Example 1: A taxpayer produced 5,000 liters of beer in January 2024 and shipped all of this product outside the production premises. Therefore, an excise tax of 2,000 manats was calculated:
5,000 x 0.4 = 2,000 manats.
However, in May 2024, due to certain reasons, 2,000 liters of that beer were returned. In this case, the payer will reduce the excise tax by 800 manats in the May excise declaration:
2000 x 0.4 = 800 manats.
Article 186-1.2 of the Tax Code states that after the producer of excise goods has released the goods to his own facilities outside the limits of the production building, when those goods are returned due to damage or expiry, the taxpayer shall apply to the tax authority for the actuation of those goods and reduction of the calculated tax. applies. Within 5 working days from the date of application, those goods are registered with the participation of the responsible persons of the tax authority.
Example 2: Deteriorated goods were returned in October 2023 in the off-premises warehouse of a manufacturer of excise goods. On the 11th of the same month, the taxpayer applies to the tax authority for the declaration of these goods and reduction of the calculated tax. With the participation of the responsible persons of the tax authority, those goods are registered within 5 working days from the date of application, i.e. from October 11.
According to Article 186-1.3 of the Tax Code, the reduction of excise duty due to damaged or expired products is carried out in the reporting period when the corresponding act is drawn up, and the drawn up act is submitted to the tax authority when the tax report is submitted. When damaged or expired products are destroyed, the excise duty replaced during the production of those products is calculated into the budget
Example 3: The taxpayer purchased 5,000 liters of potable alcohol based on an electronic invoice in July 2024 and produced 12,000 units of 0.5-liter vodka from that alcohol during the reporting period and released it outside the production premises. Also, due to the fact that part of the vodka was spoiled, a corresponding act was drawn up in July and that product was destroyed. The act drawn up during the filing of the tax report was submitted to the tax authority. In this case, let's determine the tax liability of the taxpayer on excise duty.
The amount of excise duty paid by the taxpayer for alcohol purchased is 24,000 manats:
5,000 x 4.8 = 24,000 manats.
First, the volume (quantity) of the produced excise goods is determined:
12,000 x 0.5 = 6,000 liters.
By multiplying that amount by the rate of excise duty, we find the amount of excise duty to be calculated:
6,000 x 4.8 = 28,800 manats.
Let's say that 1,000 manat excise tax was replaced for the destroyed goods. In this case, taking into account the difference between the amount of excise tax paid by the taxpayer when purchasing the goods and the amount of excise tax calculated by him in the reporting month and the amount of excise duty replaced by 1,000 manats for the destroyed goods, the excise tax liability of the taxpayer will be 5,800 manats:
28,800 – (24,000 – 1,000) = 5,800 manats.
According to Article 186-1.4 of the Tax Code, if a legal entity that is a producer of excise goods specified in Articles 190.1.1 - 190.1.3 of this Code is liquidated or the activity of an individual entrepreneur is terminated, if an unactivated mandatory mark remains in their possession, the taxpayer, when purchasing those marks has the right to recover the paid excise amounts.
Example 4: MMC, which manufactures tobacco products, bought 300,000 mandatory signs in January 2024. In October, MMC was liquidated and 100,000 unactivated mandatory tokens remained in its possession. In this case, the payer will be able to recover the excise duty paid for those 100,000 non-activated mandatory signs.
Article 186-1.5 of the Tax Code states that in the event of an increase in excise rates, a taxpayer who paid tax at a lower rate when purchasing mandatory signs shall pay the excise amount calculated based on the increased rate and the excise amount calculated based on the previous rate for non-activated mandatory signs in his possession on the date of the effective date of the change. he must pay the difference to the state budget no later than the 20th of the following month by reflecting the month in which the change came into effect in the excise declaration, and in relation to import operations, by reflecting in the customs declaration the time when the goods marked with those mandatory signs were imported.
Example 5: "AA" MMC bought 500,000 mandatory signs for tobacco cigarettes in January 2024 and paid 22,750 manats of excise tax for it. There was an increase in excise duty rates in July. As of the date of the increase, the payer had 100,000 unactivated mandatory signs in his possession, and therefore MMC calculated an additional excise amount of 5,000 manats. The payer shall indicate the difference in the July excise declaration and pay it to the state budget no later than August 20.
Example 6: In January 2024, the tobacco products factory received a mandatory mark for 400,000 different types of cigarillos worth 18,200 manats and produced 30,000 different types of cigarillos during the year. He took 20,000 of these goods outside the limits of the production building, and kept the rest in the building. Due to changes in the Tax Code in September, there was an increase in excise rates. As a result, there was a difference of 9,000 manat due to non-activated mandatory signs. In the meantime, the enterprise must pay the difference of 9,000 manats to the state budget no later than October 20 by reflecting it in the September excise declaration.
According to Article 186-1.6 of the Tax Code, in the event of a reduction in excise rates, the taxpayer who paid tax at a higher rate when purchasing mandatory signs shall pay the difference between the excise amount calculated based on the reduced rate and the excise amount calculated based on the previous rate for the non-activated mandatory signs in his possession on the date the change came into force. reduce the excise liability by reflecting in the excise declaration of the month in which the change came into effect, and in relation to import operations, by reflecting in the customs declaration drawn up for the import of goods marked with those mandatory signs.
Example 7: In January 2024, the enterprise imported 500 liters of liquid for electronic cigarettes and paid 50,000 manat excise tax on it. There was a decrease in excise rates in August, resulting in a difference of 5,000 manats. At this time, the enterprise reduces its excise liability by reflecting that 5,000 manat reduction in the customs declaration prepared for the import of goods marked with mandatory signs.
Example 8: In January 2024, the tobacco products factory received a mandatory mark for 400,000 different types of cigarillos worth 18,200 manats and produced 300,000 different types of products during the year, and 200,000 of these goods were sold outside the production premises. took out. Due to changes in the Tax Code in October, there was a decrease in excise duty rates. As a result, there was a difference of 11,000 manats due to non-activated mandatory signs. At the same time, the enterprise reduces the excise liability by reflecting the difference of 11,000 manats in the excise declaration of September.