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4 IMPORTANT CONDITIONS for the expected benefits for micro-entrepreneurs
4 IMPORTANT CONDITIONS for the expected benefits for micro-entrepreneurs
According to the additional amendment to the Tax Code to be made in 2025, some micro-entrepreneurs with a turnover of up to 45,000 manat will be able to apply a 75% discount on their income even without 3 employees.
1. Services in the field of software development;
2. Project-design and decoration services;
3. Translation services;
4. Advertising services;
5. Research and investigation activities;
6. Services provided in the field of science, education, culture and sports;
7. Consulting services in the field of law, independent auditor, accounting and finance;
8. Activities of journalists;
9. Study of market conditions;
10. Evaluation activities;
11. Courier activities;
12. Tourist guidance;
13. Export of services.
Some conditions must be met here. Only individuals who are micro-entrepreneurs will be able to use the right to a discount. It does not apply to legal entities engaged in the aforementioned activities.
Another condition is that if an individual working as a hired employee in the specified fields of activity terminates his employment contract and engages in that activity as an individual entrepreneur and provides the same services in full or in part to his previous employer within 1 year from the date of starting his activity as an individual entrepreneur, the benefit does not apply to that individual entrepreneur. That is, if an individual provides one of the aforementioned services, for example, design services, as an employee under an employment contract, and after this change, terminates his employment contract and provides services to his previous employer as an individual entrepreneur from 01.01.2025, then this benefit will not apply to that individual. He may provide services to his previous employer as an entrepreneur after at least 1 year has passed.
Another condition is that this article will apply to both the person providing the aforementioned service and the person engaged in another activity if the income he receives from this activity exceeds 50% of his total turnover income. For example, if an individual who works as both a designer and a real estate agent has an annual income of 25,000 manat from his design activity and 15,000 manat from his agency activity, then since his income from his design activity constitutes 62.5% of his total income (25,000/(40,000), the individual will be able to apply a 75% discount to all his income. However, if an individual has an annual income of 15,000 manat from his design activity and 25,000 manat from his agency activity, then since his income from his design activity constitutes 37.5% of his total turnover (15,000/(40,000), even though his total income during the year is less than 45,000 manat, he will pay tax at a rate of 20% on all his income. Similarly, if an individual has an annual income of 30,000 manat from his design activity and 20,000 manat from his agency activity, then even though the amount of his income from his design activity is It is less than 45,000 manat and more than 50% of the total income, but since the total annual income is more than 45,000 manat, the 75% discount will not apply to any of his income.
According to the additional amendment to the Tax Code to be made in 2025, some micro-entrepreneurs with a turnover of up to 45,000 manat will be able to apply a 75% discount on their income even without 3 employees.
1. Services in the field of software development;
2. Project-design and decoration services;
3. Translation services;
4. Advertising services;
5. Research and investigation activities;
6. Services provided in the field of science, education, culture and sports;
7. Consulting services in the field of law, independent auditor, accounting and finance;
8. Activities of journalists;
9. Study of market conditions;
10. Evaluation activities;
11. Courier activities;
12. Tourist guidance;
13. Export of services.
Some conditions must be met here. Only individuals who are micro-entrepreneurs will be able to use the right to a discount. It does not apply to legal entities engaged in the aforementioned activities.
Another condition is that if an individual working as a hired employee in the specified fields of activity terminates his employment contract and engages in that activity as an individual entrepreneur and provides the same services in full or in part to his previous employer within 1 year from the date of starting his activity as an individual entrepreneur, the benefit does not apply to that individual entrepreneur. That is, if an individual provides one of the aforementioned services, for example, design services, as an employee under an employment contract, and after this change, terminates his employment contract and provides services to his previous employer as an individual entrepreneur from 01.01.2025, then this benefit will not apply to that individual. He may provide services to his previous employer as an entrepreneur after at least 1 year has passed.
Another condition is that this article will apply to both the person providing the aforementioned service and the person engaged in another activity if the income he receives from this activity exceeds 50% of his total turnover income. For example, if an individual who works as both a designer and a real estate agent has an annual income of 25,000 manat from his design activity and 15,000 manat from his agency activity, then since his income from his design activity constitutes 62.5% of his total income (25,000/(40,000), the individual will be able to apply a 75% discount to all his income. However, if an individual has an annual income of 15,000 manat from his design activity and 25,000 manat from his agency activity, then since his income from his design activity constitutes 37.5% of his total turnover (15,000/(40,000), even though his total income during the year is less than 45,000 manat, he will pay tax at a rate of 20% on all his income. Similarly, if an individual has an annual income of 30,000 manat from his design activity and 20,000 manat from his agency activity, then even though the amount of his income from his design activity is It is less than 45,000 manat and more than 50% of the total income, but since the total annual income is more than 45,000 manat, the 75% discount will not apply to any of his income.