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Property tax: rules and penalties
Property tax: rules and penalties
We hereby inform you that the taxable base for property tax of a legal entity consists of fixed assets recorded on the company’s balance sheet — that is, tangible assets with a useful life of more than one year and a value exceeding 500 manats, which are subject to depreciation in accordance with Article 114 of the Tax Code.
Since land is not subject to depreciation, it is not classified as a fixed asset and does not constitute a taxable base for property tax purposes.
Please be informed that under Article 58.1 of the Tax Code, if the amount of tax (including withholding tax) indicated in the tax return is understated compared to the amount that should have been reported, or if the amount of tax due to the budget is evaded by failure to submit a return, a financial sanction equal to 50% of the understated or evaded amount of tax shall be imposed on the taxpayer (except in cases provided under Article 58.1-1 of the Tax Code), excluding additional tax amounts assessed as a result of a desk tax audit.
We would also like to draw your attention to the fact that according to Article 72.5 of the Tax Code, except for the cases specified in Article 163, if the information provided in previously submitted returns for earlier reporting periods does not correspond to the data from primary accounting documents, the taxpayer is required to submit a revised return for that reporting period. If the amount of tax payable to the budget based on the revised return is higher than the amount previously reported, the additional tax shall be paid to the budget along with applicable interest. If it is lower, the calculated tax and interest amounts shall be reduced. Revised or late-submitted tax returns may be submitted by the taxpayer up until the commencement date of a field (on-site) tax audit.
We hereby inform you that the taxable base for property tax of a legal entity consists of fixed assets recorded on the company’s balance sheet — that is, tangible assets with a useful life of more than one year and a value exceeding 500 manats, which are subject to depreciation in accordance with Article 114 of the Tax Code.
Since land is not subject to depreciation, it is not classified as a fixed asset and does not constitute a taxable base for property tax purposes.
Please be informed that under Article 58.1 of the Tax Code, if the amount of tax (including withholding tax) indicated in the tax return is understated compared to the amount that should have been reported, or if the amount of tax due to the budget is evaded by failure to submit a return, a financial sanction equal to 50% of the understated or evaded amount of tax shall be imposed on the taxpayer (except in cases provided under Article 58.1-1 of the Tax Code), excluding additional tax amounts assessed as a result of a desk tax audit.
We would also like to draw your attention to the fact that according to Article 72.5 of the Tax Code, except for the cases specified in Article 163, if the information provided in previously submitted returns for earlier reporting periods does not correspond to the data from primary accounting documents, the taxpayer is required to submit a revised return for that reporting period. If the amount of tax payable to the budget based on the revised return is higher than the amount previously reported, the additional tax shall be paid to the budget along with applicable interest. If it is lower, the calculated tax and interest amounts shall be reduced. Revised or late-submitted tax returns may be submitted by the taxpayer up until the commencement date of a field (on-site) tax audit.