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Tax incentives for cashless transactions are being expanded for entrepreneurs
Tax incentives for cashless transactions are being expanded for entrepreneurs
The next package of proposed amendments to the Tax Code is currently under discussion in the Milli Majlis. Taking into account the goals of stimulating the development of strategic sectors, strengthening the investment environment, and increasing capital investment, part of the proposed changes focuses on encouraging cashless transactions. It is planned to introduce significant tax incentives to promote cashless payments in the public catering sector. This was stated by Rashad Nuriyev, Head of the Tax Policy Main Department of the State Tax Service (STS).
According to him, the essence of this proposal is to reduce the tax burden on cashless turnover conducted via POS terminals by individuals engaged in public catering activities:
“According to the legislation, starting from 1 January 2024, 50 percent of the turnover generated through cashless payments via POS terminals for medical services provided to the population by medical institutions and individuals engaged in private medical practice is deducted from their total VAT-taxable turnover for a period of 3 years.
As a continuation of this optimization, starting from 1 January 2026, when calculating VAT for persons engaged in public catering activities and registered for VAT purposes, 50 percent of the turnover generated through cashless payments via POS terminals will be deducted from their total VAT-taxable turnover for a period of 3 years.
This initiative aims to increase cashless turnover, reduce the tax burden for catering businesses, and strengthen their financial sustainability.”
The next proposal aimed at stimulating cashless payments applies to taxpayers providing catering services who are subject to the simplified tax regime:
“The proposed incentive is to reduce the simplified tax rate on cashless turnover via POS terminals from 8 percent to 6 percent for those providing catering services under the simplified tax system.”
The department head believes that these incentives, which support businesses and promote an increase in cashless payments, will have a positive impact on combating the “shadow economy” and enhancing fiscal transparency. On the other hand, they will contribute to increased economic activity and the development of digital payment infrastructure.
The next package of proposed amendments to the Tax Code is currently under discussion in the Milli Majlis. Taking into account the goals of stimulating the development of strategic sectors, strengthening the investment environment, and increasing capital investment, part of the proposed changes focuses on encouraging cashless transactions. It is planned to introduce significant tax incentives to promote cashless payments in the public catering sector. This was stated by Rashad Nuriyev, Head of the Tax Policy Main Department of the State Tax Service (STS).
According to him, the essence of this proposal is to reduce the tax burden on cashless turnover conducted via POS terminals by individuals engaged in public catering activities:
“According to the legislation, starting from 1 January 2024, 50 percent of the turnover generated through cashless payments via POS terminals for medical services provided to the population by medical institutions and individuals engaged in private medical practice is deducted from their total VAT-taxable turnover for a period of 3 years.
As a continuation of this optimization, starting from 1 January 2026, when calculating VAT for persons engaged in public catering activities and registered for VAT purposes, 50 percent of the turnover generated through cashless payments via POS terminals will be deducted from their total VAT-taxable turnover for a period of 3 years.
This initiative aims to increase cashless turnover, reduce the tax burden for catering businesses, and strengthen their financial sustainability.”
The next proposal aimed at stimulating cashless payments applies to taxpayers providing catering services who are subject to the simplified tax regime:
“The proposed incentive is to reduce the simplified tax rate on cashless turnover via POS terminals from 8 percent to 6 percent for those providing catering services under the simplified tax system.”
The department head believes that these incentives, which support businesses and promote an increase in cashless payments, will have a positive impact on combating the “shadow economy” and enhancing fiscal transparency. On the other hand, they will contribute to increased economic activity and the development of digital payment infrastructure.