LAW OF THE AZERBAIJAN REPUBLIC

of December 16, 2016 No. 454-VQD

About introduction of amendments to the Tax Code of the Azerbaijan Republic

Being guided by Item 15 of part 1 of article 94 of the Constitution of the Azerbaijan Republic, Millie decides Majlis of the Azerbaijan Republic:

Article 1

Bring in the Tax code of the Azerbaijan Republic (Collection of the legislation of the Azerbaijan Republic, 2000, No. 8, the book I, Article 583; 2001, No. 7, Article 454, No. 9, Article 576, No. 12, Article 734; 2002, No. 5, Article 249, No. 12, Article 707; 2003, No. 8, Article 425, No. 12, book I, Article 671; 2004, No. 1, Article 1, No. 11, Article 887, No. 12, Article 980; 2005, No. 2, Article 61, No. 8, Article 688, No. 12, Article 1081; 2006, No. 12, Articles 1005, 1026; 2007, No. 1, Article 4, No. 6, Article 597, No. 8, Article 745, No. 11, Article 1053, No. 12, Article 1192; 2008, No. 7, Article 602, No. 11, Article 960; 2009, No. 7, Article 506; 2011, No. 1, Article 14, No. 7, Articles 588, 603, No. 12, Article 1115; 2012, No. 6, Articles 500, 513, No. 7, Article 652, No. 9, Article 841, No. 12, Article 1226; 2013, No. 2, Article 91, No. 4, Article 366, No. 11, Article 1278, No. 12, Articles 1483, 1486, 1495; 2014, No. 2, Articles 94, 98, No. 7, Article 770, No. 8, Article 957, No. 10, Article 1158, No. 12, Article 1525; 2015, No. 1, Article 11, No. 12, Article 1433; 2016, No. 2, book I, Article 207, No. 3, Articles 396, 402, No. 5, Article 848, No. 6, Articles 973, 974, No. 7, Article 1245, No. 10, Article 1603) following changes:

1.1. in Article 12.3 after the word "cost" to add the word", the trade allowance";

1.2. under Article 13:

1.2.1. consider the text of Article 13.2.12 the second paragraph and add the first paragraph of the following content:

"The income - total cost of the transactions connected with provision of goods (works and services) and also the extra trade income. Income acquisition time for the purposes of the taxation is established by Articles 132 and 135 of this Code.";

1.2.2. add Article 13.2.16.14-1 of the following content:

"13.2.16.14-1. the payments directly or indirectly made by permanent missions of residents and nonresidents in the Azerbaijan Republic to the subjects founded (registered) in the countries with the preferential taxation provided in article 128 of this Code;";

1.2.3. at the end of Article 13.2.49 to replace point with semicolon and to add with Articles 13.2.49-1 and 13.2.49-2 of the following content:

"13.2.49-1. The decision on preliminary establishment of the tax liability - the document provided in Article 77-1 of this Code, confirming preliminary establishment of the tax liabilities by tax authority on taxable transactions which will be performed in the future and consequence in law which will be caused by application of the tax legislation;

13.2.49-2. Voluntary tax recognition - voluntary declaring by taxpayers to tax authorities of the circumstances which are not revealed after completion of exit tax audit and being origin of the tax liability;";

1.2.4. at the end of Article 13.2.59 to replace point with semicolon and to add with Articles 13.2.60 - 13.2.71 of the following content:

"13.2.60. production of agricultural products - cultivation, bringing up of animals and birds, obtaining from them in live type of products (in initial form, without transformation into new product with use as semifinished product, without change of chemical composition, without conservation), including also industrial method (including special broiler farms, the automated systems of cowsheds and other), cultivation of products of crop production;

13.2.61. realization of agricultural products - representation of agricultural products for the purpose of of this Code within the following requirements:

13.2.61.1. the made animals (including industrial method, in special broiler farms, the automated systems of cowsheds and other places) shall be presented in the live form, and also products received from them in live type shall be in primary form, without any chemical impact;

13.2.61.2. in case of representation of crop products and other agricultural products, it shall keep primary natural form, its chemical composition shall not be changed, preserved;

13.2.62. retail sale - trading activity on sale implementation (provision) of goods to the buyer with the ultimate consumer goal and only according to the procedure, established by this Code, or with submission of the check of the control cash register (upon the demand of the legal entities and physical persons performing business activity, the invoice or the electronic invoice or the electronic tax invoice);

13.2.63. wholesale - trading activity on sale implementation (provision) of goods to the buyer for the purpose of business activity and only according to the procedure, established by this Code, with submission of the invoice or electronic invoice or electronic tax invoice;

13.2.64. the trade allowance - difference between retail selling price of goods without application of the VAT (market price in case of non-paid provision or barter of goods) and purchase price, to the paid consignor;

13.2.65. transfer price - the average price established by division of the amount of the prices fixed in transactions, performed on identical conditions between persons, except for persons, specified in Article 14-1.2 of this Code, and which are subject to comparison into the number of these transactions and also the price established based on Article 14-1 of this Code;

13.2.66. financial institution - for the purposes of of this Code, the taxpayer performing at least one of the following types of activity:

13.2.66.1. banking activity;

13.2.66.2. activities for accumulative and (or) annuitentny life insurance;

13.2.66.3. depository activity - "depositary" for the purpose of of this Code is meant the word the legal entity whose considerable part of activities is constituted by storage of financial assets for other persons. If the profit got by the company from activities for storage of financial assets for other persons and to rendering the corresponding financial services constitutes at least 20% of the profit got by it from general activities during the period smaller than the stated below periods, then storage of financial assets it is considered constituting considerable part of organization activity:

13.2.66.3.1. the three-year period which is coming to the end on December 31 (or in the last day of the accounting period which is not calendar year) the year preceding year in which the financial institution is fixed as depositary;

13.2.66.3.2. period of implementation of activities of the company;

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