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New requirements are being imposed on individuals and legal entities declared bankrupt
New requirements are being imposed on individuals and legal entities declared bankrupt
Individuals engaged in entrepreneurial activity without establishing a legal entity (sole proprietors) in Azerbaijan will be required to notify the tax authority within 15 days from the moment they are declared bankrupt and from the date the bankruptcy process is terminated.
In this regard, amendments to the Tax Code and the law “On State Registration and State Registry of Legal Entities” were discussed at today’s plenary session of the Milli Majlis.
It was stated that the draft law was prepared in accordance with the 2024 Roadmap for implementing improvements and communications under the “Business Insolvency” indicator of the World Bank Group’s “Business Ready” project. The initiative aims to ensure that information on companies and sole proprietors subject to bankruptcy proceedings is recorded respectively in the state registry of legal entities and the taxpayer registration registry.
The document also предусматривает the state registration of the fact that a legal entity is undergoing bankruptcy proceedings and requires an application to be submitted to the registration authority within no later than 15 days. In the registration of bankruptcy and insolvency procedures involving banks, the requirements of the law “On Banks” will be taken into account.
It was noted that the adoption of the draft law will regulate the registration of information on sole proprietors undergoing bankruptcy proceedings in the taxpayer registry, while information on legal entities will be recorded in the state registry of legal entities. It is also expected to strengthen the protection of the rights of entities subject to bankruptcy procedures and other concerned parties.
Providing information to the tax authority regarding bankruptcy proceedings (and, in the case of legal entities, registering such information in the state registry of legal entities) will enhance transparency in the activities of legal entities and individuals, improve risk management, and ensure more reliable protection of the property interests of debtors and creditors.
In addition, according to the Tax Code, if a taxpayer’s location or place of residence changes, or if any other information submitted in the taxpayer registration application changes, the taxpayer must notify the tax authority within 40 days.
At the same time, under the law “On State Registration and State Registry of Legal Entities,” legal entities must apply to the registration authority regarding any amendments to their founding documents within 40 days from the date such changes occur. Any amendments to the founding documents of legal entities, as well as representative offices or branches of foreign legal entities, and any subsequent changes to registered facts, must be registered in the state registry of legal entities.
Under the proposed amendment, the deadlines in both cases are reduced to 15 days. Optimizing these deadlines will allow changes in taxpayer information to be reflected more promptly in registration records and will help align both tax records and the state registry of legal entities with actual changes more quickly. Since legal entities receive their taxpayer identification number upon state registration and are considered registered for tax purposes from that moment, the amendment will also contribute to improving the accuracy of tax registration data.
Individuals engaged in entrepreneurial activity without establishing a legal entity (sole proprietors) in Azerbaijan will be required to notify the tax authority within 15 days from the moment they are declared bankrupt and from the date the bankruptcy process is terminated.
In this regard, amendments to the Tax Code and the law “On State Registration and State Registry of Legal Entities” were discussed at today’s plenary session of the Milli Majlis.
It was stated that the draft law was prepared in accordance with the 2024 Roadmap for implementing improvements and communications under the “Business Insolvency” indicator of the World Bank Group’s “Business Ready” project. The initiative aims to ensure that information on companies and sole proprietors subject to bankruptcy proceedings is recorded respectively in the state registry of legal entities and the taxpayer registration registry.
The document also предусматривает the state registration of the fact that a legal entity is undergoing bankruptcy proceedings and requires an application to be submitted to the registration authority within no later than 15 days. In the registration of bankruptcy and insolvency procedures involving banks, the requirements of the law “On Banks” will be taken into account.
It was noted that the adoption of the draft law will regulate the registration of information on sole proprietors undergoing bankruptcy proceedings in the taxpayer registry, while information on legal entities will be recorded in the state registry of legal entities. It is also expected to strengthen the protection of the rights of entities subject to bankruptcy procedures and other concerned parties.
Providing information to the tax authority regarding bankruptcy proceedings (and, in the case of legal entities, registering such information in the state registry of legal entities) will enhance transparency in the activities of legal entities and individuals, improve risk management, and ensure more reliable protection of the property interests of debtors and creditors.
In addition, according to the Tax Code, if a taxpayer’s location or place of residence changes, or if any other information submitted in the taxpayer registration application changes, the taxpayer must notify the tax authority within 40 days.
At the same time, under the law “On State Registration and State Registry of Legal Entities,” legal entities must apply to the registration authority regarding any amendments to their founding documents within 40 days from the date such changes occur. Any amendments to the founding documents of legal entities, as well as representative offices or branches of foreign legal entities, and any subsequent changes to registered facts, must be registered in the state registry of legal entities.
Under the proposed amendment, the deadlines in both cases are reduced to 15 days. Optimizing these deadlines will allow changes in taxpayer information to be reflected more promptly in registration records and will help align both tax records and the state registry of legal entities with actual changes more quickly. Since legal entities receive their taxpayer identification number upon state registration and are considered registered for tax purposes from that moment, the amendment will also contribute to improving the accuracy of tax registration data.