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Free Service from “Abacus Audit & Consulting” LLC

by Uncategorized

Accounting and tax reporting are crucial for any company. Accurate and reliable maintenance of these records enhances and strengthens the financial health of the business. Given the complexity and importance of accounting and tax reporting, delegating your financial operations to specialists offers a significant advantage.

“Abacus Audit & Consulting” LLC is a trusted firm composed of professionals who deliver these services with expertise. By collaborating with us, you gain access to an experienced and reliable accounting and audit team.

“Abacus Audit & Consulting” LLC is offering a highly attractive promotional campaign for new clients.

New clients beginning cooperation with us can enjoy our accounting, tax reporting, and consulting services completely free of charge during the first month. This is not just financially advantageous—it also demonstrates our commitment to reliability and quality. Through this campaign, we don’t just provide a free service; we showcase our work quality and the trustworthiness of our company.

With the accounting, tax reporting, and consulting services offered by “Abacus Audit & Consulting” LLC, you can strengthen your business’s financial foundation, make better-informed decisions, and reach your goals more quickly.

Note: The promotion applies to companies starting cooperation with “Abacus Audit & Consulting” LLC in June, July, and August 2023.

Don’t wait—contact us and take advantage of the free service today!

✉️ Email: [email protected] | 📲 Mobile: +994 55 213 4939 | ☎️ Tel: +994 12 310 8659

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The contribution of fixed assets to the company’s charter capital in the form of shares will be subject to VAT at a zero rate.

by Uncategorized

As is known, according to the Tax Code, except for imported property, the contribution of any property to the charter capital of an enterprise in the form of shares was considered a VAT-exempt operation. At the same time, according to the relevant article of the Tax Code, the VAT paid on goods (works and services) purchased by persons engaged in VAT-exempt or non-VATable operations is non-refundable. Therefore, according to the requirements of the Tax Code, when an asset is contributed to the charter capital, the VAT amounts paid and refunded for that asset were required to be restored to the state budget.

According to recent amendments made to the Tax Code, to reduce the tax burden of VAT payers and stimulate investment, the contribution of fixed assets to the enterprise’s charter capital in the form of shares will be subject to VAT at a zero rate. Specifically, when fixed assets are contributed as shares without direct acquisition of other property in return, the operation will be taxed at a zero VAT rate, and the VAT paid on these fixed assets will be refundable.

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The minimum monthly salary has been set at 345 manat.

by Uncategorized

As is known, according to the Tax Code, except for imported property, the contribution of any property to the charter capital of an enterprise in the form of shares was considered an operation exempt from VAT. At the same time, according to the relevant article of the Tax Code, the VAT amount paid when purchasing goods (works and services) by persons carrying out VAT-exempt or VAT-non-applicable operations is not reimbursed. In this regard, according to the requirements of the Tax Code, when an asset is contributed to the charter capital, the reimbursed VAT amounts paid for that asset were required to be restored to the state budget.

According to recent amendments to the Tax Code, to reduce the tax burden on taxpayers and stimulate investment, the contribution of fixed assets to the enterprise’s charter capital in the form of shares will be subject to a zero VAT rate for such transactions carried out by VAT payers. Specifically, if the contribution of fixed assets in the form of shares is not directly related to the acquisition of other property in return, this operation will be subject to a zero VAT rate, and the VAT amounts paid on these fixed assets will be reimbursed.

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New fees and benefits have been established for foreigners working in the liberated territories.

by Uncategorized

President Ilham Aliyev has signed a law amending the Law of the Republic of Azerbaijan “On State Duty.”

According to the law, foreigners and stateless persons who engage in paid labor activities within the territory of Azerbaijan will be charged the following state duties for obtaining and extending work permits:

  • For a 10-day period, a work permit valid up to 1 year and 6 months or its extension will cost 1600 AZN; for a permit valid up to 2 years or its extension, the fee is 1800 AZN.

  • For a 15-day period, the fee is 1400 AZN for a permit valid up to 1 year and 6 months or its extension, and 1600 AZN for a permit valid up to 2 years or its extension.

  • For a 20-day period, the fee is 1200 AZN for a permit valid up to 1 year and 6 months or its extension, and 1400 AZN for a permit valid up to 2 years or its extension.

The above durations will apply with a reduction of 5 working days for foreigners and stateless persons engaged in paid labor activities in the liberated territories of the Republic of Azerbaijan starting from January 1, 2023, for a period of 5 years.

According to the newly added Article 69.1-1 of the Migration Code, the duration of the work permit for foreigners and stateless persons employed in the labor market of the liberated territories of the Republic of Azerbaijan may be extended, each time for no more than 2 years. Except for those employed in the liberated territories, foreigners and stateless persons are granted work permits under the general rules for a period of 1 year, with extensions not exceeding 1 year at a time.

According to Article 51.5 of the Migration Code, the issuance of work permits is carried out within the quota approved by the relevant executive authority responsible for labor migration. This rule will be applied to foreigners and stateless persons employed in the labor market of the liberated territories of the Republic of Azerbaijan.

The law comes into effect on January 1, 2023.

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Additional 5 Days of Leave Granted to These Individuals – President Approves the Law

by Uncategorized

Benefits Established for Specialists Working in Azerbaijan’s Liberated Territories

According to “Qafqazinfo,” this is reflected in the amendments to the Labor Code approved by President Ilham Aliyev.

According to the law, except for persons with special ranks, a specialist working in the liberated territories is a person who holds a state certificate of vocational, secondary specialized, or higher education, has at least 24 months of work experience within the last 60 months, and works under an employment contract in the liberated territories of the Republic of Azerbaijan.

Specialists working in the liberated territories for a period of 5 years—from January 1, 2023, to January 1, 2028—who meet all the following conditions will have the right to use the benefits and privileges provided for in this Code and other laws of the Republic of Azerbaijan:

  • The employer with whom the specialists have signed an employment contract (including a legal entity’s branch or representative office registered for tax purposes under the Tax Code) is registered for tax purposes in the liberated territories of the Republic of Azerbaijan;

  • The specialist’s workplace under the employment contract is located in the liberated territories of the Republic of Azerbaijan;

  • The specialists reside in the liberated territories of the Republic of Azerbaijan.

If any of the above conditions are violated, the application of benefits and privileges will be suspended.

These specialists are classified as employees working under special conditions. In other words, increases (coefficients) will be determined to ensure a higher salary for specialists working in the liberated territories.

At the same time, according to the draft law, specialists working in the liberated territories are granted the right to additional leave; they will be given an additional 5 calendar days of leave regardless of the duration of their main and additional leave.

Granting these specialists benefits, privileges, and additional guarantees in labor relations is not considered discrimination.

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A portal has been launched for the refund of a portion of VAT paid on cashless purchases of residential and non-residential properties.

by Uncategorized

As is known, by the Decree of the President of the Republic of Azerbaijan dated May 25, 2022, the “Terms and Conditions for the Refund of Value Added Tax Paid for Residential and Non-Residential Premises Purchased Cashlessly from Persons Engaged in Construction Activities within the Territory of the Republic of Azerbaijan by Individual Consumers” was approved.

In connection with the implementation of this Decree, a relevant portal has been created within the Internet Tax Service (https://new.e-taxes.gov.az/eportal/az/login/) by the Construction Cooperative (MTK) for issuing e-invoices and submitting applications by buyers for the refund of a portion of the VAT paid on residential and non-residential premises purchased cashlessly from persons engaged in construction activities within the territory of the Republic of Azerbaijan. The portal has been in use since November 21, 2022.

Accordingly, persons engaged in construction activities issue e-invoices to the individual buyer via this portal in accordance with the requirements of the rules, and the buyer checks and confirms the accuracy of the received e-invoice data. After that, the buyer accesses the “Payments for Purchase of Residential and Non-Residential Premises” subsection in the “Utilities” payment section of the Government Payment Portal through a link located in their personal account in order to make payments in accordance with the rules (the buyer also has the option to make the payment individually at a bank). Payments are made by entering the buyer’s FIN and invoice number. Upon full payment, the buyer fills out the relevant application form in their electronic cabinet, attaches confirming documents, and applies for VAT refund through the portal.

The application is automatically submitted to the tax authority, where a relevant risk assessment is conducted. In case of refusal of a partial VAT refund based on the risk assessment results, a substantiated administrative act is issued and sent to the buyer’s electronic cabinet within 2 working days. The buyer may appeal the refusal administratively and through the court.

When there is an extraction of residential and non-residential premises, a notarized sale and purchase agreement is concluded between individuals and persons engaged in construction activities. In this case, in order to ensure the validity and full legal execution of funds related to real estate disposal agreements, the amounts payable between the parties are transferred via a deposit account opened by the notary in a bank. Upon notarization of the sale and purchase agreement, the buyer must present the relevant e-invoice to the notary and require that the payment is made in accordance with the procedure, with the principal amount transferred to the seller’s bank account and the VAT amount transferred to the VAT deposit account.

Citizens must also pay attention to the following points along with the payment form requirements during their application:

  • The buyer must fully pay the value of the residential and non-residential premises to the seller by cashless means, and no later than 90 days after that, must register on the portal, create an electronic cabinet, attach the relevant documents, and submit their application via the electronic cabinet for the VAT refund;

  • If the buyer purchases one or several residential and/or non-residential premises from the same building, the partial VAT refund mechanism applies proportionally to the paid VAT on the portion of the premises not exceeding 500 square meters each;

  • The VAT refund is made only if the value of the purchased residential and non-residential premises has been fully paid to the seller cashlessly;

  • The refunded VAT amount, after deducting service fees for bank operations by the authorized bank, is returned to the buyer through the authorized bank within 30 working days.

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Services and Products Eligible for VAT Refund – RESEARCH

by Uncategorized

One of the most popular initiatives in recent years has been the refund of part of the paid Value Added Tax (VAT) on purchased goods and services.

It’s no coincidence that, according to the latest data, nearly 1.9 million users have registered on the www.edvgerial.az portal for VAT refunds. As reported by the State Tax Service under the Ministry of Economy, from the launch of the “VAT Refund” project up to September 2022, consumers registered on the portal submitted 732 ,105,401 receipts and received over AZN 305.5 million in VAT refunds. In just January–August this year, for 303 ,851,384 receipts, more than AZN 133.6 million was refunded.

So, which goods and services are eligible for VAT refunds?

Although the State Tax Service has provided extensive information, some consumers still have questions.

APA conducted research to clarify exactly which services and goods qualify for VAT refunds.

Eligibility requirements:

  • The purchaser or service user must be a natural person, while the seller or service provider must be a VAT payer.

  • The purchased goods or services must be subject to VAT.

  • VAT refunds are only available at outlets using next-generation cash registers.

Note: Until 2024, flour, bread, and animal/poultry meat were VAT-exempt. As of this year, books are also exempt from VAT.

Moreover, for three years starting this year, VAT on agricultural products sold at retail is calculated only on the markup, not the full price—so VAT on these items is lower than on other goods.

However, not all VAT‑applicable goods are eligible for refunds. Article 165.5 of the Tax Code excludes petroleum and gas products, automobiles, alcoholic beverages, and tobacco products.

Since January 1, 2022, under the amended Tax Code, a portion of VAT paid for medical services by natural person consumers is also refundable.

Currently, refunded amounts are:

  • 15% of VAT paid by non-cash methods,

  • 10% of VAT paid by cash.

Starting 2023, it’s expected that 20% of non-cash VAT and 10% of cash VAT will be refunded.

One more exception: starting this year, for residential or non-residential properties purchased non-cash from individuals involved in construction, 30% of the VAT paid is refundable. Under Article 165.6 of the Tax Code, this applies proportionally to up to 500 m² of residential and 500 m² of non-residential space within the same building when purchased by a natural person.

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Procedures to be Followed for the Dissolution of Legal and Natural Persons

by Uncategorized

Procedures for the Dissolution of Legal Entities

Regulatory Documents:

The procedure for dissolving commercial and public legal entities (hereinafter – legal entities) is regulated by the provisions of the Civil Code and the Tax Code of the Republic of Azerbaijan, the Law of the Republic of Azerbaijan “On State Registration and State Register of Legal Entities,” and the “Rules on Deregistration of Commercial Entities and Taxpayer Registration with State Tax Authorities.”

Application Form:

Paper-based (submitted in person or by mail).

Tax Authority Where the Application is Submitted:

According to territorial jurisdiction, the Department for State Registration of Commercial Legal Entities of the State Tax Service of the Nakhchivan Autonomous Republic, the Department for State Registration of Legal Entities of the Main Department of National Revenues of the State Tax Service, and taxpayer service centers located in administrative buildings of the Territorial Tax Departments (excluding financial-industrial groups, banks, investment funds, insurance, and audit organizations).

Grounds for Dissolution of a Legal Entity:

According to Article 59 of the Civil Code, a legal entity may be dissolved in the following cases:

  • By decision of its founders or the authorized body stipulated in its charter;

  • If the registration of the legal entity is declared invalid by the court due to violations of the legislation at the time of its establishment;

  • If declared bankrupt.

Documents Submitted to the Registration Authority for Entering the Legal Entity in the “Dissolution Process” Status in the State Register:

Within 15 days from the date the liquidation commission (liquidator) is appointed, the following documents must be submitted to the registration authority:

  • Application (“Application for Deregistration from State Registration (Tax Accounting)”);

  • Decision on liquidation;

  • Official statement confirming solvency;

  • Document confirming publication of the initial notice on liquidation and creditors’ claims procedures and deadlines (not less than 60 days) in a mass media publication;

  • Seal.

If the legal entity is declared bankrupt, a court decision on bankruptcy or the creditors’ initial meeting decision declaring bankruptcy must be submitted.

If the submitted documents comply with the law, the registration authority shall enter the note “in the dissolution process” into the State Register within 5 days, register the liquidation commission members or liquidator as the legal representatives, and provide an extract from the register. From that moment on, the legal entity uses a seal marked “in the dissolution process” and adds the phrase “in the dissolution process” after its name on all documents.

Checks and Notifications at the Time of Application Acceptance:

The following should be checked and reported regarding the legal entity being deregistered in the taxpayer database:

  • Existence of legal entities created by the deregistered legal entity as a founder;

  • Whether the legal entity is registered for VAT purposes;

  • Presence of branches, representative offices, or other business units of the legal entity in the tax accounting;

  • Registration of cash registers at the business units of the legal entity;

  • Registration of POS terminals at the business units of the legal entity;

  • Existence of active bank accounts;

  • Tax debts to the state budget;

  • Submission of all required declarations/reports.

If any issues are found, the legal entity must take necessary actions to resolve them (submit closure applications for active accounting units, submit outstanding tax declarations, pay tax debts, etc.).

Documents Submitted to Deregister the Legal Entity from the State Register:

Within 10 days after the distribution or use of remaining property, the liquidation commission (liquidator) submits the following to the relevant executive authority:

  • Liquidation balance sheet;

  • Report on distribution/use of remaining property and documents confirming settlement with participants (acts, bank payment statements, etc.);

  • Original registration certificate and charter bearing the “in the dissolution process” seal;

  • For joint-stock companies, a certificate from the Financial Market Supervisory Authority regarding withdrawal of shares from circulation.

If the documents meet legal requirements, the registration authority shall remove the legal entity from the State Register within 7 days from receipt of the documents.

Duration of the Legal Entity’s Dissolution Process:

The total duration of the dissolution process shall not exceed one year from the moment the legal entity’s status “in the dissolution process” is entered into the State Register. If the period expires, the process must restart, with the note removed from the register and documents returned to the liquidation commission with a notification.

Note: The dissolution procedures for branches or representative offices of foreign legal entities follow the same rules as commercial and public legal entities, according to the Civil Code and Law on State Registration.

Procedures for the Deregistration of Natural Persons

Regulatory Documents:

Tax Code of the Republic of Azerbaijan, “Rules on Registration, Re-registration and Deregistration of Natural Persons for Tax Purposes,” and “Rules on Deregistration of Commercial Entities and Taxpayers with State Tax Authorities.”

Application Form:

Paper-based (submitted in person or by mail) or electronic.

The application form is determined by the Ministry of Taxes of Azerbaijan.

Applications must be signed and submitted only by the natural person, their authorized representative (with notarized power of attorney), or heir (guardian or custodian).

Paper applications are submitted in person to the tax authority where the person is registered or by mail. Electronic applications are submitted via the Internet Tax Service portal (www.taxes.gov.az).

Grounds for Deregistration of a Natural Person:

According to Article 34.7.3 of the Tax Code, deregistration is possible in the following cases:

  • The natural person ceases activities;

  • The person is declared deceased, missing, or incapacitated by a court;

  • The natural person passes away.

Required Documents:

  • If activities cease: Application for deregistration and original tax registration certificate (if issued);

  • If deceased, missing, or incapacitated: Court decision and original tax registration certificate;

  • If deceased: Death certificate and original tax registration certificate.

When submitting electronically, the original tax certificate must be handed over before deregistration.

If the certificate of entrepreneurial registration is lost, the natural person or their authorized representative must inform the tax authority. If no heir exists and the certificate is lost, it is not required to submit the certificate for deregistration.

Checks and Notifications at the Time of Application Acceptance:

The following must be checked and notified regarding the deregistered person in the tax database:

  • Submission of applications for deregistration from VAT;

  • Deregistration of business units/objects;

  • Deregistration of registered cash registers;

  • Deregistration of POS terminals;

  • Closure of active bank accounts;

  • Payment of tax debts to the state budget;

  • Submission of outstanding declarations/reports.

If any of these issues are detected, the natural person must take necessary measures (submit applications for closure of accounting units, submit outstanding declarations, pay tax debts).

Result:

Following the completion of all necessary procedures (closing bank accounts, deregistering cash registers and business units, paying tax debts, submitting outstanding declarations, completing any final tax audits), the natural person is deregistered from the tax records.

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Digitalization in Tax Policy Yields Beneficial Results

by Uncategorized

One of the main directions of the tax policy implemented in our country is the further expansion of the application of digital approaches and solutions in tax administration and the efficient use of existing resources for this purpose. Tax policy is being adapted to the pace of changes in the digital economy and the developing economic environment.

Expansion of Digitalization and Electronic Services Continues

The State Tax Service (STS) is undertaking necessary efforts to expand the number of electronic services and to further modernize these services. In Azerbaijan, tax declarations have been submitted electronically for many years, an electronic tax invoice system is in place, and more than 60 electronic services are provided to taxpayers. Currently, over 90% of taxpayers nationwide submit their reports and declarations electronically. Tax authorities are working on innovations that simplify the existing system to help entrepreneurs fulfill their tax obligations. The service system is being improved in line with taxpayers’ expectations and demands. Preparations are underway to enable micro and small entrepreneurs to fulfill their tax obligations via mobile applications, i.e., simple mobile apps. One of the main goals is to minimize live contact between entrepreneurs and tax authorities and to ensure that each taxpayer can access any service anytime, anywhere. The application of new technologies supports targeted government services, the complete transfer of interactions with taxpayers to electronic format, and full transparency in these relations. New technologies play a significant role in increasing voluntary compliance with tax legislation. This contributes to strengthening mutual trust between society and the state, enhancing citizen satisfaction, and ensuring transparency of the economy for all parties.

Digital Solutions Are More Effective for Fulfilling Tax Obligations

One of the main goals of digital transformation at the State Tax Service is to establish an efficient and fast data processing system that enables agile decision-making. The use of digitalization is not limited to services provided to taxpayers but also applies to analysis, auditing, and desk audits, using programs based on artificial intelligence and modern information technologies. Efforts continue to improve the application of IT in tax administration, including the further expansion of electronic services. The Digital Transformation Council operates to increase the efficiency of operations in the IT field, develop unified principles and standards, manage digitalization and automation processes within the STS, and ensure the highest levels of security and uninterrupted operations.

Systematic Fight Against the “Shadow Economy” and Increasing Transparency…

Among the digital tools applied by tax authorities, the introduction of next-generation control-cash registers is a significant event for further improving the business environment and advancing entrepreneurial activity to a new qualitative level. The main benefit of this innovation is the increased transparency, which serves both entrepreneurs’ and the state’s interests. The use of new cash registers allows for more transparent settlements, prevents illegal circulation of goods, and ensures control over turnover. Currently, more than 71,000 such cash registers have been installed in the country. Since these cash registers allow remote monitoring of taxpayers’ activities and offer flexible settlement methods, the scope of activities requiring their use is expanding. The expansion of their application positively impacts the innovative “VAT Refund” project. This year, amendments to the legislation included the VAT refund mechanism for medical services. The “VAT refund” mechanism has been implemented not only for retail trade and public catering but also for medical services, aiming to increase turnover transparency in the healthcare sector and encourage citizens’ direct participation.

According to the “2022-2026 Socio-Economic Development Strategy,” systematic efforts to combat the “shadow economy” and increase transparency include expanding digitalization in tax policy. Among other targets, the coverage of digital tax collection (the ratio of submitted invoices and online cash register turnover to declared turnover) aims to exceed 75%.Digital tax services

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Decree of the President of the Republic of Azerbaijan on Amendments to the “Regulation on the Form and Procedure for Maintaining a Unified Information Register of Inspections Conducted in the Field of Entrepreneurship,” approved by Decree No. 383 dated February 15, 2011

by Uncategorized

Based on Clause 32 of Article 109 of the Constitution of the Republic of Azerbaijan, I have decided:

To amend Clause 4.5-2 of the “Regulation on the Form and Procedure for Maintaining a Unified Information Register of Inspections Conducted in the Field of Entrepreneurship,” approved by the Decree No. 383 of the President of the Republic of Azerbaijan dated February 15, 2011 (Legislative Collection of the Republic of Azerbaijan, 2011, No. 2, Article 87; 2015, No. 8, Article 910; 2016, No. 8, Article 1384; 2017, No. 3, Article 377, No. 10, Article 1778; 2018, No. 10, Article 2001; 2019, No. 5, Article 857; 2020, No. 6, Article 707; 2021, No. 5, Article 450; Decrees No. 1766 dated July 26, 2022, and No. 1784 dated August 2, 2022, of the President of the Republic of Azerbaijan), by adding the words “, as well as in case of an extension of the inspection period during a field tax audit in accordance with Article 36.3-1 of the Tax Code of the Republic of Azerbaijan, within 1 working day from the time the decision on this extension is made” after the words “until the inspection is completed)”.

Ilham Aliyev
President of the Republic of Azerbaijan
Baku city, August 22, 2022

Source: https://president.az/az/articles/view/56989