Azerbaijan amends Tax Code to ensure transparent settlements

By Trend

Amendments have been made to the Tax Code of Azerbaijan to strengthen tax control and ensure transparency in the conduct of settlements, the State Tax Service (STS) under the Ministry of Economy told Trend.

The amendments envisage stimulating business activities, expanding the tax base, reducing the financial and tax burden through social payments, as well as improving accounting, taxation and control mechanisms.

"One of the important amendments to the Tax Code is due to the fact that from January 1 of this year, when making a payment transaction between taxpayers, a payment order submitted to a bank or other persons carrying out banking transactions must contain information about specific details in the payment purpose,” STS said. “Thus, taxpayers are obliged to provide information on specific details of payment orders for the transfer of goods, works and services received, as well as on debts and advance payments received by taxpayers. In case of non-fulfillment of these obligations, the Tax Code provides for sanctions.”

So, according to the service, taxpayers must submit information containing the number of the e-invoice to which payment belongs, the series and number of the cargo customs declaration (CCD) or a short import declaration on foreign economic activity, the date and number of the invoice for the purchase of services.

Besides, the information must contain advance payment or the date and number of the agreement or annex to the agreement between the parties, the date and number of the loan agreement concluded between the parties, or the date and number of the request for debt repayment.

"A taxpayer who doesn’t indicate or distort the above information in a payment order is subject to a financial sanction in the amount of 100 manat ($58.8) for each such payment order,” the STS further noted. “In practice, during settlements between business entities, numerous disputes over tax control measures occur. In this regard, amendments to legislation reflect information on specific details in the appointment of payment orders in order to improve settlements, strengthen tax control in this area and ensure transparency of transactions.”

“These amendments will increase payment discipline in settlements between taxpayers and eliminate disputes during tax control measures," added the State Tax Service.