Approved by the Ministry of taxes of the Azerbaijan Republic of December 26, 2000 No. 12/12-25/1101-5498

Methodical instructions for calculation and the tax discharge for the simplified system

1. General provisions

1. These Methodical instructions are prepared according to the Tax code of the Azerbaijan Republic and determine rules of calculation and the tax discharge by the simplified system.

2. The concepts used in these Methodical instructions express the values established by the Tax code.

2. Taxpayers

1. Taxpayers on the simplified system are the companies which are not registered for the purpose of the value added tax according to the procedure, stipulated in Article 155.1 Tax codes, except for the companies making excise goods, credit and insurance companies, investment funds, professional participants of the security market.

Rules and conditions of registration and cancellation of registration for the purpose of the VAT are provided in Chapter XI of the Tax code.

2. The company, being the taxpayer on the simplified system, for the purpose of ensuring control of emergence of the obligation on registration for the purpose of the VAT monthly shall calculate amount of taxable transactions for the preceding three-months period and compare it to the limiting amount established in article 155.1 of the Tax Code.

3. The company shall estimate and pay tax on the simplified system for the entire periods of not passing or cancellation of registration for the purpose of the VAT according to requirements of the Tax code, except for the companies making excise goods, credit and insurance companies, investment funds, professional participants of the security market.

4. If not the taxable amount of the monthly income changed, then in case of determination of the obligation on registration for the purpose of the VAT or limiting amount of taxable transactions for the three-months period it is necessary to consider the period of emergence of change.

Example 1. Till September 1 of year under the existing legislation the free amount of the monthly income constitutes 100.000 manats, and its 1000-fold size-100. 000, 0 thousand manats (100.000 x 1000).

Since September 1 change according to which the free sum of the monthly income is determined in 150.000 manats is made to the legislation. In October in case of limiting determination of amount of taxable transactions for the preceding three-months period (July, August, September) for registration for the purpose of the VAT set 2/3 1000-fold sizes of the free amount of the monthly income one months prior to change (July, August) is taken as basis (100.000,0: 3 x 2) and 1/3 1000-fold sizes of the free amount of the monthly income for September after change (150.000,0: 3 x 1).

3. Taxation object

1. The taxation object is the total amount of the total sales received by the taxpayer in the accounting period for the goods provided to them the performed works, the rendered services and property, and also from non-operating activities.

2. The companies paying tax on the simplified system are not payers of the VAT, the income tax, land tax, the property tax.

3. The tax is estimated for goods (the performed works, the rendered services) and property, provided by the company and its structural divisions (branches, objects, etc.), not being legal entities, and also for the total amount of revenue from non-operating activities.

4. Tax rate on the simplified system

The tax rate on the simplified system constitutes 2% of the amount of the means (total amount of revenue) received by payers of this tax from provision of goods, performance of works and rendering services.

5. Calculation, the tax discharge on the simplified system and submission of the declaration

1. The companies passing to the tax discharge on the simplified system (at which the income for the preceding three-months period does not exceed the 1000-fold size of the free amount of the monthly income), within 10 days after the end of the preceding three-months period represent to territorial Tax Administration (department) the statement for the transition to the tax discharge on the simplified system according to the procedure specified in appendix to these Methodical instructions.

2. In case of exceeding of amount of taxable transactions for the preceding three-months period of the 1000-fold size of the free amount of the monthly income of the company, paying tax on the simplified system, shall within 10 days after the end of this period provide to tax authority the notification in the form given in appendix to these Methodical instructions, the registration application for the purpose of the VAT and provide calculation and tax payment in general procedure.

3. The tax amount on the simplified system for the accounting period is estimated by application of the tax rate, the stipulated in Item 4 presents of Methodical instructions, to the total amount of revenue for the accounting period.

Example 2. The total sales received by the company from provision of goods, performance of works, rendering services within quarter constituted 50000, 0 thousand manats. In this period the proceeds from sales of property constituted 20000, 0 thousand manats, and the income from non-operating transactions-10000,0 of one thousand manats. In this case the tax amount on the simplified system constitutes 1600, 0 thousand manats (50000,0 + 20000,0 + 10000,0) x 2%).

Example 3. The total sales received by the company from provision of goods, performance of works, rendering services within quarter constituted 50000, 0 thousand manats. In this period the proceeds from sales of property constituted 20000, 0 thousand manats, and losses from non-operating transactions-10000,0 of one thousand manats. In this case the tax amount on the simplified system constitutes 1400, 0 thousand manats (50000,0 + 20000,0) x 2%).

4. According to article 155.1 of the Tax Code for the purposes of the VAT taxpayers are determined by limiting amount of taxable transactions. And turnovers from non-operating transactions are not taken into consideration for the purposes of article 155.1 of the Tax Code as VATes are not assessed. Therefore the companies paying tax on the simplified system in case of exceeding of total amount of revenue for prior three months of the 1000-fold size of the free amount of the monthly income in view of its increase because of the income from non-operating transactions remain taxpayers on the simplified system.

Example 4. The total sales received by the company from provision of goods, performance of works, rendering services for the preceding three-months period constituted 50000, 0 thousand manats. In this period the proceeds from sales of property constituted 20000, one thousand manats, the income from non-operating transactions-45000,0 of one thousand manats, including the economic sanctions paid to the company - 20000, 0 thousand manats, and the income from change in the exchange rate of foreign currency-25000,0 of one thousand manats. In this case, as the amount of transactions, liable to VAT, for the preceding three-months period makes 70000 thousand manats (50000 + 20000), the company remains the taxpayer on the simplified system.

5. The accounting period for tax on the simplified system is quarter.

6. Taxpayers on the simplified system to the 20th following the accounting period represent the declaration on the tax amount which is subject to payment, constituted for reporting quarter in the form approved by the order of the Ministry of taxes of December 18, 2000 No. A - 214, to Tax Administrations (departments) where they are registered, and in the same terms pay tax to the budget.

7. The companies, being taxpayers on the simplified system, keep financial accounting according to the procedure, established by the legislation.

Appendix

to Methodical instructions for calculation and the tax discharge for the simplified system

Methodical instructions for registration of taxpayers for the purpose of the value added tax, to calculation and the tax discharge on value added

1. General provisions

1. These Methodical instructions are prepared according to the Tax code of the Azerbaijan Republic.

2. The concepts used in Methodical instructions express the values established by the Tax code of the Azerbaijan Republic.

3. Payers of the VAT shall be registered for the purpose of the VAT in tax authority in which stay on the registry.

4. Registration and removal from registration are made free of charge.

5. If international treaties which the Azerbaijan Republic joined including Agreements or the Laws on the principles of collection of indirect taxes during the importing and commodity export (works, services), about the equity Section of production, about the main pipeline, etc., and also the Law on oil and gas establish provisions others, than are provided by these Methodical instructions, then for the purposes of calculation and the tax discharge on value added provisions of these international treaties are applied.

 

2. Concept of the value added tax

1. The value added tax (dalee-NDS) is form of collection in the budget of part of addition to the cost of goods, works and services in case of their production, accomplishment, rendering and the address in the territory of the Azerbaijan Republic, and also part of cost of all taxable goods imported on the territory of the Azerbaijan Republic. The VAT is paid at all production phases and deliveries of goods, performance of works and rendering services. The VAT amount, subject to payment from taxable turnover, is established in the form of difference between the tax amount estimated from such turnover and the tax amount which is subject to compensation according to the invoices exposed according to provisions of these Methodical instructions.

For the purposes of the VAT provision of intangible assets is considered rendering services.

For the purposes of the VAT of the right from which the royalty is levied are considered as intangible assets, and their transfer (provision) - rendering services.

 

3. Taxpayers

1. Payers of the VAT are the persons registered or which are subject to registration as payers the VAT, including legal and physical resident persons and nonresidents.

2. The registered person since the moment of entry into force of registration becomes taxpayer. Person who shall submit the registration application, but was not registered, it is considered the taxpayer since the beginning of the accounting period following the period of emergence of the obligation about filing of application on registration.

3. Persons importing goods to the Azerbaijan Republic liable to VAT, are considered as payers of the VAT on such import goods.

4. The nonresident person who is performing works or rendering services without passing of registration for the purpose of the VAT and subject to attraction to tax according to the Section "Taxation of Nonresidents" of these Methodical instructions is considered taxpayer on these works or services.

5. The joint business activity performed without formation of legal entity for the purposes of the VAT is considered the isolated face.

6. The obligation of payment of the VAT arises in the following cases:

* for person registered as the payer of the VAT - from the effective date registration;

* for the person which was not registered for the purpose of the VAT, but subject to such registration - since the beginning of the accounting period following the period of emergence of the obligation about filing of application on registration;

* for person registered as the payer of the VAT who during the periods preceding the date of entry into force of this registration had obligation about filing of application on registration - since the beginning of the accounting period following the period of emergence of the obligation about filing of application on registration.

 

4. Taxation object

1. The taxation object are the value added of taxable transactions and taxable import.

For the purposes of these Methodical instructions under value added of taxable transactions all cost of these transactions means.

2. Delivery of goods, performance of works and rendering services in the territory of the Azerbaijan Republic within independent business activity of joint business activity without formation of legal entity are considered as taxable transactions, except delivery of goods, performance of works and rendering the services exempted from tax. Rendering services or performance of works outside the Azerbaijan Republic does not join in taxable transactions.

Provision (transfer) in one structural unit of the company to other its structural unit of products, semifinished products, works and services for industrial and production needs is not considered the taxation object.

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info