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In which case can a micro-entrepreneur not benefit from the 75% tax exemption?
In which case can a micro-entrepreneur not benefit from the 75% tax exemption?
Article 155.1-1, added to the Tax Code as of 2026, states that in determining the volume of taxable transactions under Article 155.1 of the Code, the taxpayer’s turnover generated from retail trade and services provided to persons not registered with the tax authority, based on cashless payments made through POS terminals, shall be taken into account by applying a coefficient of 0.5.
Suppose the taxpayer’s total turnover amounts to 250,000 manats. If 120,000 manats of this amount is generated from payments made via POS terminals, then pursuant to the provisions of Article 155.1-1, the obligation to register for VAT does not arise. In this case, can the taxpayer be considered a micro-entrepreneur for profit tax purposes and benefit from the 75% tax relief, or should profit tax be calculated at the rate of 20%?
The State Tax Service under the Ministry of Economy has stated that, in accordance with Article 155.1-1 of the Tax Code, when determining the obligation to submit an application for VAT registration, the taxpayer’s turnover generated from retail trade and services provided to persons not registered with the tax authority, based on cashless payments made via POS terminals, is taken into account by applying a coefficient of 0.5.
In response to the inquiry, it was further clarified that Article 155.1-1 of the Tax Code is used solely to determine whether the obligation for VAT registration arises. Therefore, since your annual income exceeds 200,000 manats, the profit earned will be subject to profit tax at a rate of 20% when submitting the profit tax return.
Legal basis: Articles 105.1 and 155.1-1 of the Tax Code.
Article 155.1-1, added to the Tax Code as of 2026, states that in determining the volume of taxable transactions under Article 155.1 of the Code, the taxpayer’s turnover generated from retail trade and services provided to persons not registered with the tax authority, based on cashless payments made through POS terminals, shall be taken into account by applying a coefficient of 0.5.
Suppose the taxpayer’s total turnover amounts to 250,000 manats. If 120,000 manats of this amount is generated from payments made via POS terminals, then pursuant to the provisions of Article 155.1-1, the obligation to register for VAT does not arise. In this case, can the taxpayer be considered a micro-entrepreneur for profit tax purposes and benefit from the 75% tax relief, or should profit tax be calculated at the rate of 20%?
The State Tax Service under the Ministry of Economy has stated that, in accordance with Article 155.1-1 of the Tax Code, when determining the obligation to submit an application for VAT registration, the taxpayer’s turnover generated from retail trade and services provided to persons not registered with the tax authority, based on cashless payments made via POS terminals, is taken into account by applying a coefficient of 0.5.
In response to the inquiry, it was further clarified that Article 155.1-1 of the Tax Code is used solely to determine whether the obligation for VAT registration arises. Therefore, since your annual income exceeds 200,000 manats, the profit earned will be subject to profit tax at a rate of 20% when submitting the profit tax return.
Legal basis: Articles 105.1 and 155.1-1 of the Tax Code.