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Are tax benefits applied to an entrepreneur operating in several fields?
Are tax benefits applied to an entrepreneur operating in several fields?
In 2024, an individual entrepreneur operated in the field of repair and construction as a micro-entrepreneur without hiring any employees and, since he had no employees, was unable to benefit from the 75% income tax exemption for that year. In 2025, in addition to this activity, he also began to engage in project-design activities. The entrepreneur’s 2025 income amounted to 30,000 manats from repair and construction activities and 40,000 manats from project-design activities. Taking into account the amendments made to the Tax Code regarding the 75% exemption starting from 2025, will the mentioned individual entrepreneur be eligible for a tax exemption?
According to the State Tax Service under the Ministry of Economy, as of January 1, 2025, the tax exemption provided for in Article 102.1.30-1 of the Tax Code applies only to individuals engaged in the types of activities listed in that article, whose annual income (excluding expenses) from those activities does not exceed 45,000 manats.
Furthermore, under Article 102.9 of the Tax Code, also effective from January 1, 2025, if an individual engaged in the activities specified in Article 102.1.30-1 simultaneously engages in other types of activities, the right to benefit from the exemption provided in that article applies only if the share of annual income derived from the activities specified in Article 102.1.30-1 constitutes at least 50% of the individual’s total annual income.
Accordingly, considering that the individual engaged in both project-design and repair-construction activities earned up to 40,000 manats from project-design and that this income represents more than 50% of his total annual income (40,000 / 70,000 × 100 = 57%), a 75% income tax exemption applies to the total income earned from both activities.
In 2024, an individual entrepreneur operated in the field of repair and construction as a micro-entrepreneur without hiring any employees and, since he had no employees, was unable to benefit from the 75% income tax exemption for that year. In 2025, in addition to this activity, he also began to engage in project-design activities. The entrepreneur’s 2025 income amounted to 30,000 manats from repair and construction activities and 40,000 manats from project-design activities. Taking into account the amendments made to the Tax Code regarding the 75% exemption starting from 2025, will the mentioned individual entrepreneur be eligible for a tax exemption?
According to the State Tax Service under the Ministry of Economy, as of January 1, 2025, the tax exemption provided for in Article 102.1.30-1 of the Tax Code applies only to individuals engaged in the types of activities listed in that article, whose annual income (excluding expenses) from those activities does not exceed 45,000 manats.
Furthermore, under Article 102.9 of the Tax Code, also effective from January 1, 2025, if an individual engaged in the activities specified in Article 102.1.30-1 simultaneously engages in other types of activities, the right to benefit from the exemption provided in that article applies only if the share of annual income derived from the activities specified in Article 102.1.30-1 constitutes at least 50% of the individual’s total annual income.
Accordingly, considering that the individual engaged in both project-design and repair-construction activities earned up to 40,000 manats from project-design and that this income represents more than 50% of his total annual income (40,000 / 70,000 × 100 = 57%), a 75% income tax exemption applies to the total income earned from both activities.