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Tax and social security obligations of individuals in entrepreneurial activities
Tax and social security obligations of individuals in entrepreneurial activities
According to Article 33.4 of the Tax Code, an individual conducting entrepreneurial activity without forming a legal entity must submit an application for tax registration to the tax authority before starting their entrepreneurial activity (obtain a Tax Identification Number) and pay taxes on the income earned to the state budget.
Tax obligations will consist of the relevant taxes (simplified tax or income tax, VAT) in accordance with the tax system selected and the taxable objects specified in the registration application.
In addition, for entrepreneurial activities, mandatory social insurance contributions must be calculated and paid monthly as follows: 50% of the minimum monthly wage in the construction sector and 25% in other sectors, with adjustments: 100% in Baku, 90% in Sumgayit and Ganja, 80% in other cities, 60% in administrative centers of districts and settlements, and 50% in rural areas.
Furthermore, according to the provisions of the Law of the Republic of Azerbaijan “On Medical Insurance,” individual entrepreneurs must pay mandatory health insurance contributions equal to 4% of the minimum monthly wage.
According to Article 33.4 of the Tax Code, an individual conducting entrepreneurial activity without forming a legal entity must submit an application for tax registration to the tax authority before starting their entrepreneurial activity (obtain a Tax Identification Number) and pay taxes on the income earned to the state budget.
Tax obligations will consist of the relevant taxes (simplified tax or income tax, VAT) in accordance with the tax system selected and the taxable objects specified in the registration application.
In addition, for entrepreneurial activities, mandatory social insurance contributions must be calculated and paid monthly as follows: 50% of the minimum monthly wage in the construction sector and 25% in other sectors, with adjustments: 100% in Baku, 90% in Sumgayit and Ganja, 80% in other cities, 60% in administrative centers of districts and settlements, and 50% in rural areas.
Furthermore, according to the provisions of the Law of the Republic of Azerbaijan “On Medical Insurance,” individual entrepreneurs must pay mandatory health insurance contributions equal to 4% of the minimum monthly wage.