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After the new changes, how is the right to a concession regulated when an individual entrepreneur engages in another activity?
After the new changes, how is the right to a concession regulated when an individual entrepreneur engages in another activity?
One of the issues that concerns our colleagues is the fact that a taxpayer may engage in activities other than those specified in Article 102.1.30-1 of the Tax Code. According to the second paragraph of Article 102.9 of the Tax Code, a person engaged in the activities outlined in Article 102.1.30-1 and at the same time involved in other activities can benefit from the concessionary right only if the income from the activities listed in Article 102.1.30-1 constitutes no less than 50% of the total annual income.
Let’s explain the requirements of the article with an example.
Example 1: A taxpayer engaged in car repairs also provides advertising services on their social media. Over the course of the year, the individual entrepreneur’s income from car repairs and advertising services is 30,000 and 12,000 manats, respectively (without considering expenses). As seen, the taxpayer’s total income for the year is 42,000 manats, which is less than 45,000 manats. However, the taxpayer will not be able to apply the 75% income tax discount because the share of income from car repairs in the total income is 71.42% (30,000 manat from car repairs / 42,000 manat total income). Since the share of income from advertising is less than 50%, the 75% discount will not apply.
Example 2: An individual entrepreneur is involved in repairing household appliances as well as courier services. The taxpayer’s annual income from household appliance repairs (without considering expenses) is 15,000 manats, and from courier services, it is 35,000 manats. The income from courier services constitutes more than 50% of the total income: 70% (35,000 manats from courier services / 50,000 manats total income). However, since the total annual income is 50,000 manats, which exceeds the 45,000 manat limit set in Article 102.1.30-1 of the Tax Code, the entrepreneur will pay income tax at a rate of 20%. The reason why the 75% discount is not applied is that the total income exceeds 45,000 manats.
Example 3: An individual entrepreneur has an income of 20,000 manats (without considering expenses) from locksmith services for the year 2025, and an income of 22,000 manats from tourism guiding services (without considering expenses). Since tourism guiding is listed in the activities outlined in Article 102.1.30-1 of the Tax Code, and the share of income from tourism guiding in total income is 52.38% (22,000 manats from tourism guiding / 42,000 manats total income from both activities), the taxpayer will benefit from a 75% income tax discount. Therefore, the 75% discount will be applied to the total income of 42,000 manats after expenses are deducted.
One of the issues that concerns our colleagues is the fact that a taxpayer may engage in activities other than those specified in Article 102.1.30-1 of the Tax Code. According to the second paragraph of Article 102.9 of the Tax Code, a person engaged in the activities outlined in Article 102.1.30-1 and at the same time involved in other activities can benefit from the concessionary right only if the income from the activities listed in Article 102.1.30-1 constitutes no less than 50% of the total annual income.
Let’s explain the requirements of the article with an example.
Example 1: A taxpayer engaged in car repairs also provides advertising services on their social media. Over the course of the year, the individual entrepreneur’s income from car repairs and advertising services is 30,000 and 12,000 manats, respectively (without considering expenses). As seen, the taxpayer’s total income for the year is 42,000 manats, which is less than 45,000 manats. However, the taxpayer will not be able to apply the 75% income tax discount because the share of income from car repairs in the total income is 71.42% (30,000 manat from car repairs / 42,000 manat total income). Since the share of income from advertising is less than 50%, the 75% discount will not apply.
Example 2: An individual entrepreneur is involved in repairing household appliances as well as courier services. The taxpayer’s annual income from household appliance repairs (without considering expenses) is 15,000 manats, and from courier services, it is 35,000 manats. The income from courier services constitutes more than 50% of the total income: 70% (35,000 manats from courier services / 50,000 manats total income). However, since the total annual income is 50,000 manats, which exceeds the 45,000 manat limit set in Article 102.1.30-1 of the Tax Code, the entrepreneur will pay income tax at a rate of 20%. The reason why the 75% discount is not applied is that the total income exceeds 45,000 manats.
Example 3: An individual entrepreneur has an income of 20,000 manats (without considering expenses) from locksmith services for the year 2025, and an income of 22,000 manats from tourism guiding services (without considering expenses). Since tourism guiding is listed in the activities outlined in Article 102.1.30-1 of the Tax Code, and the share of income from tourism guiding in total income is 52.38% (22,000 manats from tourism guiding / 42,000 manats total income from both activities), the taxpayer will benefit from a 75% income tax discount. Therefore, the 75% discount will be applied to the total income of 42,000 manats after expenses are deducted.