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Procedure for calculation and payment of VAT on services provided by non-residents
Procedure for calculation and payment of VAT on services provided by non-residents
According to Article 169.1 of the Tax Code, if a non-resident who is not registered for VAT purposes provides services or performs work within the territory of the Republic of Azerbaijan to a tax agent specified in Articles 169.2 or 169.5 of this Code (excluding electronic services related to hotel bookings and airline tickets outside Azerbaijan), such services or works are subject to taxation in accordance with this Article.
A non-resident who provides work or services without VAT registration and is subject to taxation under Article 169 of the Tax Code is considered a taxpayer for those services or works. A VAT-registered taxpayer who pays the calculated VAT on the amount payable to the non-resident into the state budget is entitled to offset that amount in accordance with the provisions of the Tax Code. According to Article 169.4, if the tax agent is registered for VAT purposes, the calculated tax is paid when submitting the VAT declaration for the month in which the transaction occurred. The payment document confirming the payment of the calculated tax serves as the document granting the tax agent the right to offset VAT in accordance with Article 175 of the Code — this document is the electronic invoice.
According to Article 169.3, when Article 169.1 is applied, the taxable transaction date is considered to be the date the payment is made. If payment is made before the transaction occurs, the taxable transaction is deemed to have taken place at the time of payment. Accordingly, VAT on services provided by a non-resident is calculated based on the exchange rate on the day of payment and reflected in the VAT declaration for the month in which the payment was made.
According to Article 169.1 of the Tax Code, if a non-resident who is not registered for VAT purposes provides services or performs work within the territory of the Republic of Azerbaijan to a tax agent specified in Articles 169.2 or 169.5 of this Code (excluding electronic services related to hotel bookings and airline tickets outside Azerbaijan), such services or works are subject to taxation in accordance with this Article.
A non-resident who provides work or services without VAT registration and is subject to taxation under Article 169 of the Tax Code is considered a taxpayer for those services or works. A VAT-registered taxpayer who pays the calculated VAT on the amount payable to the non-resident into the state budget is entitled to offset that amount in accordance with the provisions of the Tax Code. According to Article 169.4, if the tax agent is registered for VAT purposes, the calculated tax is paid when submitting the VAT declaration for the month in which the transaction occurred. The payment document confirming the payment of the calculated tax serves as the document granting the tax agent the right to offset VAT in accordance with Article 175 of the Code — this document is the electronic invoice.
According to Article 169.3, when Article 169.1 is applied, the taxable transaction date is considered to be the date the payment is made. If payment is made before the transaction occurs, the taxable transaction is deemed to have taken place at the time of payment. Accordingly, VAT on services provided by a non-resident is calculated based on the exchange rate on the day of payment and reflected in the VAT declaration for the month in which the payment was made.