Taxes Ministry clarifies new amendments

By Azernews

By Nigar Abbasova

The recent changes to the Tax Code of Azerbaijan are still among issues in the spotlight. The amendments that have come into force since January 2017 aroused a big interest of the society, while the change envisaging taxation of e-trade became the most discussed issue.

In this regard, the Taxes Ministry provided thorough information about the change, envisaging collection of VAT from individuals participating in online competitions and purchasing operations.

The change will be applied in reference to those using e-services, including a purchase of e-books, music, audio and video materials, digital games, software, as well as ad placement and other similar services, a source in the ministry told Trend.

The standard VAT rate in the country is determined at the level of 18 percent.

The source said VAT will be charged should Azerbaijani citizens use the services (rendered by non-residents) at the territory of the country. Exceptions are a purchase of airline tickets and reservation of rooms in hotels by means of online services.

Purchasers will not be charged should the service is rendered at the territory of another country. For instance, customers of UBER will be charged as the company does not have a representative office in Azerbaijan (non-resident), but renders its services at the territory of the country.

Under the changes, citizens will be charged while paying for services of distance learning (which are rendered abroad). Besides, users of e-banking services, which are rendered by foreign banks, will also pay VAT.   

To get the information about the sum paid for the service (all tax included), citizens non-registered by tax authorities should apply to the bank, rendering the services or use online services of the bank. Those, registered by tax authorities are able to manage their account and get information on implemented transactions.

Financial Market Supervisory Body (FMSB) and the Taxes Ministry earlier agreed on granting a one-month delay for the development and application of the taxation mechanism by banks. Therefore, during January VAT will not be imposed on services purchased through e-trade.