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Do tax incentives apply to income earned from YouTube?
I plan to start operating on the YouTube platform in the near future and earn income through Google AdSense. My question is whether the income I receive from my YouTube channel through Google AdSense is considered advertising service income under Article 102.1.30-1 of the Tax Code, and whether the 75% personal income tax exemption applies if my annual income does not exceed AZN 45,000. In addition, is it mandatory to employ three salaried employees to benefit from this exemption? I intend to operate on my own. In this case, if I register as a sole proprietor, can I benefit from the 2% simplified tax regime?
The State Tax Service under the Ministry of Economy stated that the activity described in the inquiry is considered entrepreneurial activity, and therefore the individual must register as a taxpayer before commencing the activity.
According to Article 102.1.30-1 of the Tax Code, where the annual income (before deducting expenses) of individuals engaged in the activities specified in that Article does not exceed AZN 45,000, 75% of such income is exempt from personal income tax.
However, where a taxpayer carries out non-genuine (non-goods) transactions, the tax incentive provided under this Article does not apply to income derived from such transactions.
It was further clarified that if an individual is engaged in other business activities in addition to the eligible activities, the tax exemption under Article 102.1.30-1 may only be applied if income from the eligible activities accounts for at least 50% of the individual's total annual income.
In response to the inquiry, it was stated that if the annual income of a sole proprietor registered as an individual does not exceed AZN 45,000, the three-employee requirement does not apply. If the activity qualifies as advertising services under Article 102.1.30-1, the individual may benefit from the 75% income tax exemption.
Furthermore, pursuant to Article 218.5.10 of the Tax Code, persons providing works or services to taxpayers other than unregistered individuals (the general public) are not eligible to apply the simplified tax regime.
Accordingly, where the individual's income is paid solely by the YouTube platform and, as a sole proprietor, the individual provides services to another legal entity, the person is not eligible to be a simplified taxpayer and must instead operate as a personal income taxpayer.
Legal basis: Articles 33, 34, 102.1.30-1 and 218.5.10 of the Tax Code.
I plan to start operating on the YouTube platform in the near future and earn income through Google AdSense. My question is whether the income I receive from my YouTube channel through Google AdSense is considered advertising service income under Article 102.1.30-1 of the Tax Code, and whether the 75% personal income tax exemption applies if my annual income does not exceed AZN 45,000. In addition, is it mandatory to employ three salaried employees to benefit from this exemption? I intend to operate on my own. In this case, if I register as a sole proprietor, can I benefit from the 2% simplified tax regime?
The State Tax Service under the Ministry of Economy stated that the activity described in the inquiry is considered entrepreneurial activity, and therefore the individual must register as a taxpayer before commencing the activity.
According to Article 102.1.30-1 of the Tax Code, where the annual income (before deducting expenses) of individuals engaged in the activities specified in that Article does not exceed AZN 45,000, 75% of such income is exempt from personal income tax.
However, where a taxpayer carries out non-genuine (non-goods) transactions, the tax incentive provided under this Article does not apply to income derived from such transactions.
It was further clarified that if an individual is engaged in other business activities in addition to the eligible activities, the tax exemption under Article 102.1.30-1 may only be applied if income from the eligible activities accounts for at least 50% of the individual's total annual income.
In response to the inquiry, it was stated that if the annual income of a sole proprietor registered as an individual does not exceed AZN 45,000, the three-employee requirement does not apply. If the activity qualifies as advertising services under Article 102.1.30-1, the individual may benefit from the 75% income tax exemption.
Furthermore, pursuant to Article 218.5.10 of the Tax Code, persons providing works or services to taxpayers other than unregistered individuals (the general public) are not eligible to apply the simplified tax regime.
Accordingly, where the individual's income is paid solely by the YouTube platform and, as a sole proprietor, the individual provides services to another legal entity, the person is not eligible to be a simplified taxpayer and must instead operate as a personal income taxpayer.
Legal basis: Articles 33, 34, 102.1.30-1 and 218.5.10 of the Tax Code.