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Who can benefit from a 75% tax incentive?
Who can benefit from a 75% tax incentive?
In October 2025, my employment contract was terminated, and I started operating as an individual entrepreneur. I provide consultancy services to banks (different from my former employer) in accordance with code “6202202 – Consultancy on the selection of optimal decisions.” My income from entrepreneurial activity for the period October–December 2025 is less than 45,000 manats. Can I benefit from the 75% tax incentive when paying income tax for 2025?
The State Tax Service under the Ministry of Economy has reported that, starting from January 1, 2025, if the income earned during a calendar year (without considering expenses) by individuals engaged in the types of activities specified in Article 102.1.30-1 of the Tax Code does not exceed 45,000 manats, 75% of such income is exempt from income tax.
The specified types of activities include software development services, project design and decoration services, translation services, advertising services, research and development activities, services provided in the fields of science, education, culture, and sports, legal services, independent auditing, accounting and financial consultancy services, journalistic activities, market research, valuation activities, order delivery and courier services (excluding freight transportation by motor vehicles), tourism guiding, and export of services.
It is noted that if non-goods transactions are carried out by a taxpayer, the tax incentive established under this article does not apply to income derived from such non-goods transactions. Additionally, if an individual who previously worked as an employee in the activity areas specified in Article 102.1.30-1 of the Tax Code terminates their employment contract, engages in the same activity as an individual entrepreneur, and provides the same services wholly or partially to their former employer within one year from the date of commencement of entrepreneurial activity, the tax incentive shall not apply to that individual entrepreneur.
Furthermore, if an individual engaged in the specified activity areas is simultaneously involved in other types of activities, they may benefit from the tax incentive provided under Article 102.1.30-1 of the Tax Code only if the share of annual income obtained from those specified activities in the total annual income is not less than 50%.
In response to the inquiry, it is stated that consultancy services on the selection of optimal decisions do not fall under the activity types specified in Article 102.1.30-1 of the Tax Code; therefore, the envisaged tax incentive will not be applicable.
Legal basis: Article 102.1.30-1 of the Tax Code
In October 2025, my employment contract was terminated, and I started operating as an individual entrepreneur. I provide consultancy services to banks (different from my former employer) in accordance with code “6202202 – Consultancy on the selection of optimal decisions.” My income from entrepreneurial activity for the period October–December 2025 is less than 45,000 manats. Can I benefit from the 75% tax incentive when paying income tax for 2025?
The State Tax Service under the Ministry of Economy has reported that, starting from January 1, 2025, if the income earned during a calendar year (without considering expenses) by individuals engaged in the types of activities specified in Article 102.1.30-1 of the Tax Code does not exceed 45,000 manats, 75% of such income is exempt from income tax.
The specified types of activities include software development services, project design and decoration services, translation services, advertising services, research and development activities, services provided in the fields of science, education, culture, and sports, legal services, independent auditing, accounting and financial consultancy services, journalistic activities, market research, valuation activities, order delivery and courier services (excluding freight transportation by motor vehicles), tourism guiding, and export of services.
It is noted that if non-goods transactions are carried out by a taxpayer, the tax incentive established under this article does not apply to income derived from such non-goods transactions. Additionally, if an individual who previously worked as an employee in the activity areas specified in Article 102.1.30-1 of the Tax Code terminates their employment contract, engages in the same activity as an individual entrepreneur, and provides the same services wholly or partially to their former employer within one year from the date of commencement of entrepreneurial activity, the tax incentive shall not apply to that individual entrepreneur.
Furthermore, if an individual engaged in the specified activity areas is simultaneously involved in other types of activities, they may benefit from the tax incentive provided under Article 102.1.30-1 of the Tax Code only if the share of annual income obtained from those specified activities in the total annual income is not less than 50%.
In response to the inquiry, it is stated that consultancy services on the selection of optimal decisions do not fall under the activity types specified in Article 102.1.30-1 of the Tax Code; therefore, the envisaged tax incentive will not be applicable.
Legal basis: Article 102.1.30-1 of the Tax Code