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How are tax obligations determined for journalists?
How are tax obligations determined for journalists?
Journalists can carry out their activities either as individual entrepreneurs (with a Taxpayer Identification Number – TIN) or as legal entities. In both cases, their tax and social obligations are regulated in accordance with legislative norms. According to the requirements of the Tax Code, the activities of independent journalists may be subject to either simplified taxation or income (profit) tax obligations. For this type of activity, a cash register, activity code, POS terminal, or license is not required. So, how much tax must a journalist operating as an individual entrepreneur pay? Expert Nahid Ibrahim provides clarification.
According to Article 102.1.30-1.8 of the Tax Code of the Republic of Azerbaijan, individual entrepreneurs (natural persons) engaged in journalistic activities are entitled to an exemption from income tax in the amount of 75% of the income (before deducting expenses) earned during a calendar year, for the portion up to 45,000 manats. This exemption applies only to income derived from journalistic activities. If the annual income from such activity exceeds 45,000 manats, the exemption does not apply. In this case, income tax is calculated at a rate of 20%, taking into account deductible expenses from the income.
It should also be noted that if the annual turnover from journalistic activities exceeds 200,000 manats, the individual must register for Value Added Tax (VAT) and fulfill the corresponding VAT obligations.
Example 1: If subject to income tax (with exemption):
Suppose the annual income of an individual entrepreneur journalist is 36,000 manats. 75% of this amount is exempt from tax:
36,000 × 75% = 27,000 manats.
The taxable amount will then be 9,000 manats:
36,000 – 27,000 = 9,000 manats;
9,000 × 20% = 1,800 manats (income tax).
Example 2: If subject to income tax (without exemption):
Suppose the annual income of an individual entrepreneur journalist is 65,000 manats, with expenses of 35,500 manats. In this case, the taxable amount will be 29,500 manats, and tax is calculated at the rate of 20%:
29,500 × 20% = 5,900 manats.
Example 3: If subject to simplified tax:
Suppose the annual income of an individual entrepreneur journalist is 36,000 manats. Since the simplified tax regime applies, no exemption is granted. In this case, the journalist must calculate and pay 2% of annual income:
36,000 × 2% = 720 manats.
Before starting activity, an individual entrepreneur engaged in journalism must correctly determine the form of activity, the economic activity code, and the applicable tax regime. This is essential to maximize the benefits of tax exemptions provided by law and to avoid additional fiscal risks.
Journalists can carry out their activities either as individual entrepreneurs (with a Taxpayer Identification Number – TIN) or as legal entities. In both cases, their tax and social obligations are regulated in accordance with legislative norms. According to the requirements of the Tax Code, the activities of independent journalists may be subject to either simplified taxation or income (profit) tax obligations. For this type of activity, a cash register, activity code, POS terminal, or license is not required. So, how much tax must a journalist operating as an individual entrepreneur pay? Expert Nahid Ibrahim provides clarification.
According to Article 102.1.30-1.8 of the Tax Code of the Republic of Azerbaijan, individual entrepreneurs (natural persons) engaged in journalistic activities are entitled to an exemption from income tax in the amount of 75% of the income (before deducting expenses) earned during a calendar year, for the portion up to 45,000 manats. This exemption applies only to income derived from journalistic activities. If the annual income from such activity exceeds 45,000 manats, the exemption does not apply. In this case, income tax is calculated at a rate of 20%, taking into account deductible expenses from the income.
It should also be noted that if the annual turnover from journalistic activities exceeds 200,000 manats, the individual must register for Value Added Tax (VAT) and fulfill the corresponding VAT obligations.
Example 1: If subject to income tax (with exemption):
Suppose the annual income of an individual entrepreneur journalist is 36,000 manats. 75% of this amount is exempt from tax:
36,000 × 75% = 27,000 manats.
The taxable amount will then be 9,000 manats:
36,000 – 27,000 = 9,000 manats;
9,000 × 20% = 1,800 manats (income tax).
Example 2: If subject to income tax (without exemption):
Suppose the annual income of an individual entrepreneur journalist is 65,000 manats, with expenses of 35,500 manats. In this case, the taxable amount will be 29,500 manats, and tax is calculated at the rate of 20%:
29,500 × 20% = 5,900 manats.
Example 3: If subject to simplified tax:
Suppose the annual income of an individual entrepreneur journalist is 36,000 manats. Since the simplified tax regime applies, no exemption is granted. In this case, the journalist must calculate and pay 2% of annual income:
36,000 × 2% = 720 manats.
Before starting activity, an individual entrepreneur engaged in journalism must correctly determine the form of activity, the economic activity code, and the applicable tax regime. This is essential to maximize the benefits of tax exemptions provided by law and to avoid additional fiscal risks.