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Is a tax break applied to income earned from YouTube?
Is a tax break applied to income earned from YouTube?
I am an individual who is a resident of the Republic of Azerbaijan. At present, I do not have any other place of employment and earn income solely through my own channel on the YouTube platform via Google AdSense. I do not have any sponsored advertisements or contracts with third parties. My income is obtained from a foreign source (Google) and is transferred to my bank account. I am registered as an individual entrepreneur and have a Tax Identification Number (TIN/VÖEN). I would like to know whether this activity is considered an activity eligible for an income tax exemption under Article 102.1.30-1 of the Tax Code. If a tax exemption applies, what percentage of the annual income is exempt from taxation? In this case, what social insurance payment obligations arise?
The State Tax Service under the Ministry of Economy has stated that, in accordance with Article 101.3 of the Tax Code, income earned by individuals who carry out entrepreneurial activities without establishing a legal entity is subject to income tax at a rate of 20 percent.
At the same time, it is stated that as of January 1, 2025, if the income earned during a calendar year by individuals engaged in the activities specified in Article 102.1.30-1 of the Tax Code (without taking expenses into account) does not exceed 45,000 manats, 75 percent of such income shall be exempt from income tax. If the taxpayer carries out non-commodity (non-goods) transactions, the tax exemption established under this article shall not apply to income derived from such non-commodity transactions.
Additionally, it is stated that if an individual engaged in the specified activities simultaneously carries out other types of activities, the exemption provided for in Article 102.1.30-1 may be applied only if the share of annual income derived from the specified activities in total annual income is not less than 50 percent.
In response, it is stated that since the relevant activities include advertising activities and the export of services, you are entitled to benefit from the tax exemption.
According to Article 14.5.1 of the Law of the Republic of Azerbaijan “On Social Insurance,” a mandatory state social insurance contribution for entrepreneurial activity shall be paid in the amount of 2 percent of income (without deduction of expenses), provided that such contribution is not less than 15 percent and not more than 100 percent of the minimum monthly wage.
I am an individual who is a resident of the Republic of Azerbaijan. At present, I do not have any other place of employment and earn income solely through my own channel on the YouTube platform via Google AdSense. I do not have any sponsored advertisements or contracts with third parties. My income is obtained from a foreign source (Google) and is transferred to my bank account. I am registered as an individual entrepreneur and have a Tax Identification Number (TIN/VÖEN). I would like to know whether this activity is considered an activity eligible for an income tax exemption under Article 102.1.30-1 of the Tax Code. If a tax exemption applies, what percentage of the annual income is exempt from taxation? In this case, what social insurance payment obligations arise?
The State Tax Service under the Ministry of Economy has stated that, in accordance with Article 101.3 of the Tax Code, income earned by individuals who carry out entrepreneurial activities without establishing a legal entity is subject to income tax at a rate of 20 percent.
At the same time, it is stated that as of January 1, 2025, if the income earned during a calendar year by individuals engaged in the activities specified in Article 102.1.30-1 of the Tax Code (without taking expenses into account) does not exceed 45,000 manats, 75 percent of such income shall be exempt from income tax. If the taxpayer carries out non-commodity (non-goods) transactions, the tax exemption established under this article shall not apply to income derived from such non-commodity transactions.
Additionally, it is stated that if an individual engaged in the specified activities simultaneously carries out other types of activities, the exemption provided for in Article 102.1.30-1 may be applied only if the share of annual income derived from the specified activities in total annual income is not less than 50 percent.
In response, it is stated that since the relevant activities include advertising activities and the export of services, you are entitled to benefit from the tax exemption.
According to Article 14.5.1 of the Law of the Republic of Azerbaijan “On Social Insurance,” a mandatory state social insurance contribution for entrepreneurial activity shall be paid in the amount of 2 percent of income (without deduction of expenses), provided that such contribution is not less than 15 percent and not more than 100 percent of the minimum monthly wage.