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VAT calculation rules for electronic commerce payments to non-residents
VAT calculation rules for electronic commerce payments to non-residents
We hereby inform that according to the tax legislation, when payments are made by persons not registered with the tax authorities to a non-resident who is not registered for VAT purposes for the provision of works and services under the electronic commerce procedure, VAT must be calculated and paid on the amount payable to the non-resident in accordance with the procedure established by this article.
If the recipient of the works and services under the electronic commerce procedure is a person not registered with the tax authorities, the VAT calculated by the local bank or the branch of a foreign bank in the Republic of Azerbaijan is paid to the budget from the funds of the recipient.
Electronic commerce is understood as the type of activity carried out using information systems related to the sale of goods, provision of services, and performance of works (including the downloading of electronic books, music, audio-video materials, graphic images, virtual games, software, placing advertisements, and other similar works and services via the Internet).
As can be seen, except for electronic commerce, when payments are made by persons not registered with the tax authorities to a non-resident, the calculation of VAT by banks is not provided for by the legislation.
We hereby inform that according to the tax legislation, when payments are made by persons not registered with the tax authorities to a non-resident who is not registered for VAT purposes for the provision of works and services under the electronic commerce procedure, VAT must be calculated and paid on the amount payable to the non-resident in accordance with the procedure established by this article.
If the recipient of the works and services under the electronic commerce procedure is a person not registered with the tax authorities, the VAT calculated by the local bank or the branch of a foreign bank in the Republic of Azerbaijan is paid to the budget from the funds of the recipient.
Electronic commerce is understood as the type of activity carried out using information systems related to the sale of goods, provision of services, and performance of works (including the downloading of electronic books, music, audio-video materials, graphic images, virtual games, software, placing advertisements, and other similar works and services via the Internet).
As can be seen, except for electronic commerce, when payments are made by persons not registered with the tax authorities to a non-resident, the calculation of VAT by banks is not provided for by the legislation.