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The duties of some taxpayers have changed: rules, information
The duties of some taxpayers have changed: rules, information
As we have previously reported, a number of new requirements have been introduced in the Tax Code, which came into force on January 1, 2025, along with editorial changes. Expert Anar Bayramov comments on these changes.
According to the change made to Article 16.1.4-1 of the Tax Code, the taxpayer is required to submit documents and information, as specified by the relevant authority determined by the relevant executive authority in accordance with the rules defined in Article 14-1.9 of the Tax Code, upon the request of the tax authority.
It should be noted that Article 14-1.9 of the Tax Code regulates the determination of transfer prices. By the decision of the Collegium of the Ministry of Taxes dated January 27, 2017, No. 1717050000006200, the rules for determining and applying transfer prices were established. These rules require the taxpayer to provide both documents and information. However, since the Tax Code's Article 16.1.4-1 only mentioned documents, it was necessary to add the word "information."
Another editorial change relates to the group of multinational companies. The Collegium of the Ministry of Economy of the Republic of Azerbaijan, by its decision No. 1 dated April 28, 2020, approved the "Deadline, Form, and Procedure for Submitting the Report of an Azerbaijani Resident Enterprise within a Group of Multinational Companies to the Tax Authority." According to these rules, the main enterprise, authorized enterprise, or intra-group enterprise within a multinational group, a resident of the Republic of Azerbaijan, must submit the notification (Appendix 2) attached to this rule to the tax authorities via electronic application by June 30 of the reporting year. The notification must cover the following:
- Whether it is the main or authorized enterprise;
- If it is neither the main nor authorized enterprise, determining which entity should submit the relevant report and its residency status;
- The financial year of the multinational group.
Therefore, the words "and notification" were added after "report" in Article 16.9 of the Tax Code.
Regarding the mentioned article, another change was made. In the first sentence of Article 16.9, the phrase "an enterprise resident of the Republic of Azerbaijan" was replaced with the phrase "a taxpayer registered for tax purposes in the Republic of Azerbaijan." The purpose of this change is to eliminate the difference in the application of the terms under Article 13.2.5 of the Tax Code and the concept of residency in Article 16.9. Prior to the change, the phrase "an enterprise resident of the Republic of Azerbaijan" in Article 16.9 did not cover the branches and representative offices of foreign companies within the multinational groups in Azerbaijan.
With the addition of the phrase "a taxpayer registered for tax purposes in the Republic of Azerbaijan" to Article 16.9, the branches and representative offices of foreign companies and permanent residents in Azerbaijan are now included in the scope of the article.
Thus, taking both changes into account, Article 16.9 of the Tax Code is as follows: "If the total revenue of the multinational group in its financial year exceeds the manat equivalent of 750 million euros, the multinational group, which is included in the group of multinational companies and is a taxpayer registered for tax purposes in the Republic of Azerbaijan, must submit the report and notification to the tax authority within the period, form, and procedure approved by the relevant executive authority, in accordance with the international agreements to which the Republic of Azerbaijan is a party and for the purpose of implementing automated data exchange with the competent authorities of other states. The threshold for the amount requiring the submission of the report specified in this article is determined based on the financial statements of the multinational group."
As we have previously reported, a number of new requirements have been introduced in the Tax Code, which came into force on January 1, 2025, along with editorial changes. Expert Anar Bayramov comments on these changes.
According to the change made to Article 16.1.4-1 of the Tax Code, the taxpayer is required to submit documents and information, as specified by the relevant authority determined by the relevant executive authority in accordance with the rules defined in Article 14-1.9 of the Tax Code, upon the request of the tax authority.
It should be noted that Article 14-1.9 of the Tax Code regulates the determination of transfer prices. By the decision of the Collegium of the Ministry of Taxes dated January 27, 2017, No. 1717050000006200, the rules for determining and applying transfer prices were established. These rules require the taxpayer to provide both documents and information. However, since the Tax Code's Article 16.1.4-1 only mentioned documents, it was necessary to add the word "information."
Another editorial change relates to the group of multinational companies. The Collegium of the Ministry of Economy of the Republic of Azerbaijan, by its decision No. 1 dated April 28, 2020, approved the "Deadline, Form, and Procedure for Submitting the Report of an Azerbaijani Resident Enterprise within a Group of Multinational Companies to the Tax Authority." According to these rules, the main enterprise, authorized enterprise, or intra-group enterprise within a multinational group, a resident of the Republic of Azerbaijan, must submit the notification (Appendix 2) attached to this rule to the tax authorities via electronic application by June 30 of the reporting year. The notification must cover the following:
- Whether it is the main or authorized enterprise;
- If it is neither the main nor authorized enterprise, determining which entity should submit the relevant report and its residency status;
- The financial year of the multinational group.
Therefore, the words "and notification" were added after "report" in Article 16.9 of the Tax Code.
Regarding the mentioned article, another change was made. In the first sentence of Article 16.9, the phrase "an enterprise resident of the Republic of Azerbaijan" was replaced with the phrase "a taxpayer registered for tax purposes in the Republic of Azerbaijan." The purpose of this change is to eliminate the difference in the application of the terms under Article 13.2.5 of the Tax Code and the concept of residency in Article 16.9. Prior to the change, the phrase "an enterprise resident of the Republic of Azerbaijan" in Article 16.9 did not cover the branches and representative offices of foreign companies within the multinational groups in Azerbaijan.
With the addition of the phrase "a taxpayer registered for tax purposes in the Republic of Azerbaijan" to Article 16.9, the branches and representative offices of foreign companies and permanent residents in Azerbaijan are now included in the scope of the article.
Thus, taking both changes into account, Article 16.9 of the Tax Code is as follows: "If the total revenue of the multinational group in its financial year exceeds the manat equivalent of 750 million euros, the multinational group, which is included in the group of multinational companies and is a taxpayer registered for tax purposes in the Republic of Azerbaijan, must submit the report and notification to the tax authority within the period, form, and procedure approved by the relevant executive authority, in accordance with the international agreements to which the Republic of Azerbaijan is a party and for the purpose of implementing automated data exchange with the competent authorities of other states. The threshold for the amount requiring the submission of the report specified in this article is determined based on the financial statements of the multinational group."