Approved by the Law of the Azerbaijan Republic of July 11, 2000, No. 905-IQ
1.1. The tax code of the Azerbaijan Republic determines system of taxes, the general principles of the taxation in the Azerbaijan Republic, the rules of establishment, payment and taxation, the right and obligation of taxpayers and the state tax authorities, and also other participants of the tax relations connected with the tax matters, forms and methods of tax control, responsibility for violation of the legislation on taxes and rules of appeal of actions (failure to act) of the state tax authorities and their officials.
1.2. This Code determines the general principles of the taxation and taxes in the Nakhchivan Autonomous Republic and in municipalities.
1.3. The concepts and rules determined by this Code are established for the purpose of the taxation and applied only within the relations connected with the taxation and tax control, regulated by this Code and other regulatory legal acts adopted on its basis.
1.4. Provisions of this Code on general bases of the taxation, rules of tax payment (excepting payment sources), the rights and obligations of taxpayers and the state tax authorities, and also other participants of the tax relations on the tax matters, to forms and methods of tax control, responsibility for violation of the tax legislation, rules of appeal of actions (failure to act) of the state tax authorities and their officials are applied also to fees on compulsory national social insurance, compulsory medical insurance and insurance on unemployment.
2.1. The tax legislation of the Azerbaijan Republic consists of the Constitution of the Azerbaijan Republic, of this Code and legal acts of the Azerbaijan Republic adopted according to them.
2.2. The regulatory legal acts adopted on the basis of of this Code or for the purpose of its execution shall not contradict provisions of this Code.
2.3. In cases of emergence of contradiction on the tax matters and tax control between acts of the legislation on taxes and legal acts of other industries, except for stipulated in Article 2.7 of this Code, acts of the legislation on taxes are applied.
2.4. The tax matters and tax control cannot be included in other legal acts, except the legislation on taxes, except for:
2.4.1. regulations on the administrative offenses concerning the tax relations provided by the Code of the Azerbaijan Republic about administrative offenses;
2.4.2. regulations on the tax offenses provided by the Criminal code of the Azerbaijan Republic;
2.4.3. regulations on priority of the tax liabilities, stipulated by the legislation about insolvency and bankruptcy;
2.4.4. the provisions of the budget legislation connected with taxes;
2.4.5. the provisions connected with provision of the state guarantees on taxes;
2.4.6. the provisions provided by agreements or the laws on the equity Section of production, on the main pipeline, etc.;
2.4.8. the provisions provided by the Law of the Azerbaijan Republic "On regulation performed in the sphere entrepreneurships and protection of interests of entrepreneurs" concerning tax audits (except for cameral tax audits);
2.4.9. the provisions provided by the Law of the Azerbaijan Republic "About the Alyatsky free economic zone".
2.4-1. Provisions in connection with provision of tax releases and privileges are established only by this Code. Other regulatory legal acts, except of this Code, including the regulatory legal acts specified in Article 2.4 of this Code (except for Article 2.4.9 of this Code), cannot provide provisions in connection with tax releases and privileges. The tax releases and privileges encouraging business and investing activities cannot have individual character.
2.5. If international treaties which the Azerbaijan Republic joined establish regulations on taxes, excellent from provided by this Code and regulatory legal acts adopted according to it, then provisions of these international treaties are applied.
2.6. If the international treaty on avoidance of double taxation which the Azerbaijan Republic joined is used by person which is not resident of the state which signed such agreement for receipt of privileges and privileges, then concerning the tax benefits and privileges provided by the specified agreement to resident of the state which signed such agreement, Article 2.5 provisions. of this Code are not applied.
2.7. If the agreements and the laws on the equity Section of production, on the main pipeline, etc. approved to or after entry into force of this Code including the laws on oil and gas activities of the export direction and on special economic zones, on oil and gas, establish provisions, excellent from provided by this Code and other regulatory legal acts about taxes, then provisions of the specified agreements or the laws are applied.
2.7-1. The questions connected with the taxation and tax control, tax releases and privileges in the Alyatsky free economic zone are regulated according to requirements of the Law of the Azerbaijan Republic "About the Alyatsky free economic zone".
2.8. In case of need of introduction of amendments to the Tax Code of the Azerbaijan Republic in connection with determination of tax policy, tax administration and the tax rates within the draft of the government budget of the next year drafts of these laws and assessment of the tax releases and privileges provided in projects are represented to relevant organ of the executive authority till May 1 of the current year, and the relevant organ of the executive authority represents their Millie to Majlis of the Azerbaijan Republic no later than May 15 of the current year.
3.1. The legislation on taxes is based on generality, equality and justice of the taxation.
3.2. Taxes shall have economic case.
3.3. It is not allowed to establish the taxes interfering implementation of constitutional rights and freedoms of everyone.
3.4. It is not allowed to establish the taxes breaking common economic space of the Azerbaijan Republic (in particular, free movement of the territories of the Azerbaijan Republic of goods (works, services) directly or indirectly limiting and money, or differently limiting legal activities of taxpayers or interfering it).
3.5. Nobody can be forced more than once to pay tax of one type from the got profit (income).
3.6. Taxes cannot have discrimination character and be established proceeding from the political, ideological, ethnic, confessional and other existing distinctions between taxpayers.
It is forbidden to establish tiered rates of taxes depending on pattern of ownership or nationality of physical persons or the place of origin of the capital.
Paragraph third ceased to be valid.
3.7. Taxes of the Azerbaijan Republic are established by exclusively this Code, their change or cancellation are performed by introduction of amendments to this Code.
3.8. To anybody the obligation cannot be assigned to pay the taxes having the signs of taxes established by this Code and which are not established by this Code or established by other rules than it is determined by this Code.
3.9. The legislation on taxes shall be formulated so that everyone precisely knew what taxes in what procedure when and in what size it shall pay.
3.10. The taxation system shall stimulate business and investing activities.
3.11. All contradictions, ambiguities in the legislation on taxes are interpreted for benefit of the taxpayer.
3.12. The possibility of free acquaintance with regulatory legal acts on taxes shall be provided to physical persons and legal entities.
4.1. In the Azerbaijan Republic the following taxes are established and levied:
4.1.1. national taxes;
4.1.2. taxes of the autonomous republic;
4.1.3. local (municipal) taxes.
4.2. The national taxes are implied as the taxes established by this Code and which are subject to payment in all territory of the Azerbaijan Republic.
4.3. Taxes of the autonomous republic are implied as the taxes established by the laws of the Nakhchivan Autonomous Republic according to this Code and paid in the Nakhchivan Autonomous Republic.
4.4. Local (municipal) taxes are implied as the taxes established by this Code and the relevant law, applied according to the decision of municipalities and paid in the territory of municipalities. Other obligatory payments applied by municipalities are established by the relevant law.
Rates of the local taxes (municipal taxes) are established in the limits enshrined in the tax legislation. Municipalities according to the tax legislation can make decisions on release in the territories fully or partially of separate categories of taxpayers from the local taxes, on reduction of a tax rate.
4.5. In the Azerbaijan Republic according to this Code it can be applied special and temporary tax regimes.
The special tax regime is meant as special procedure for calculation and tax payment during the certain period.
The temporary tax regime is meant as the temporary procedure for charge and tax payment applied concerning all or part of subjects of entrepreneurship during the certain period in connection with essential change of economic situation as a result of impact of natural disasters, epidemics, epizooty, large environmental and other disasters in also processes happening in global economic environment.
4.6. It is not allowed to establish the taxes which are not provided by this Code.
5.0. The amounts of taxes are levied in the following forms:
5.0.2. according to the declaration (collection of tax after income acquisition or arrived)
5.0.3. according to the notification (payment by the taxpayer of tax on the basis of the payment notice provided on the amount added by tax authority or municipality based on the project cost of the taxation and the area).
6.1.1. the income tax from physical persons;
6.1.2. the income tax of legal entities (except the companies and the organizations which are in municipal property);
6.1.3. value added tax;
6.1.5. property tax of legal entities;
6.1.6. the land tax from legal entities and, in case, stipulated in Article 206.1 of this Code, from physical persons;
6.1.7. road tax;
6.1.8. tax of trade;
6.1.9. the simplified tax;
6.2. This Code establishes limiting rates of all national taxes.
6.3. The rates of the national taxes applied annually cannot exceed the rates established by this Code and can annually be reviewed in case of adoption of law on the government budget of the Azerbaijan Republic.
8.1. Treat local (municipal) taxes:
8.1.1. the land tax from physical persons in the cases provided by Articles 206.1-1 and 206.3 of this Code;
8.1.2. property tax of physical persons;
8.1.3. the tax of trade on construction materials of local value;
8.1.4. the income tax of the companies and organizations which are in municipal property.
8.2. Rules of calculation and payment of the local taxes, the rights and obligations of taxpayers and bodies of Tax Service of municipalities, forms and methods of tax control, responsibility for violation of the tax legislation, rule of appeal of actions (failure to act) of bodies of Tax Service of municipalities and their officials are established by the relevant legislation.
In the territory of the Azerbaijan Republic taxes are estimated and paid in monetary unit of the Azerbaijan Republic - manats.
10.0. Participants of the relations regulated by the legislation on taxes are:
10.0.1. the legal entities and physical persons recognized according to this Code taxpayers;
10.0.2. the legal entities and physical persons recognized according to this Code tax agents;
10.0.3. state tax authorities of the Azerbaijan Republic;
10.0.4. customs authorities of the Azerbaijan Republic;
10.0.5. financial bodies of the Azerbaijan Republic in connection with the solution of the questions provided by this Code;
10.0.6. the public authorities, local government bodies, other authorized bodies and officials performing in accordance with the established procedure in addition to tax and customs authorities deduction from taxpayers of means for collection of taxes and their transfer in the government budget in the cases provided by this Code.
The tax is the obligatory, individual and non-paid payment transferred into the government and local budgets if other is not provided by this Code, in the form of alienation of the taxpayers of money who are in property for the purpose of financial provision of activities of the state and municipalities.
12.1. The tax is considered established in that case when are determined the taxpayer and the following elements of the taxation:
12.1.1. taxation object;
12.1.2. taxation basis;
12.1.3. tax period;
12.1.4. tax rate;
12.1.5. procedure for calculation of tax;
12.1.6. procedure and payment due date of tax.
12.2. In case of establishment of tax tax benefits on the bases provided by this Code can be established.
12.3. The taxation objects are the income, profit, property, the earth, minerals, cost, the trade allowance of the provided goods (works, services) or other taxation objects provided by this Code.
12.4. The taxation basis is quantitative expression of taxable part of the taxation object.
Article 13. The basic concepts used in this Code
13.1. Concepts civil, family and other industries of the legislation of the Azerbaijan Republic, used in this Code, are applied in that value in what they are accepted in these industries of the legislation if other is not provided by this Code.
13.2. For the purposes of of this Code the following concepts are used:
13.2.1. Person - any physical person or legal entity, permanent mission, branch or other division of the nonresident.
13.2.2. The legal entity - the companies and the organizations created in the status of the legal entity according to the legislation of the Azerbaijan Republic or the legislation of foreign state.
13.2.3. The physical person - the citizen of the Azerbaijan Republic, the foreigner and the stateless person.
13.2.4. The taxpayer - any person who shall pay taxes on the taxation objects determined according to this Code.
22.214.171.124. any physical person answering at least to one of the requirements provided below:
• actually being in the territory of the Azerbaijan Republic in total more than 182 days of calendar year;
• being in the foreign country in public service of the Azerbaijan Republic in calendar year or within one calendar year;
• if the term of stay of physical person in the territory of the Azerbaijan Republic and in foreign state (in any) according to paragraphs to second and third Article 126.96.36.199. of this Code is not exceeded by 182 days that the specified physical person is recognized resident of the Azerbaijan Republic by the criteria specified in the following sequence:
• permanent residence;
• center of vital interests;
• place of ordinary residence;
• citizenship of the Azerbaijan Republic;
188.8.131.52. the physical person is recognized the nonresident of the Azerbaijan Republic from the last day of stay in the territory of the Azerbaijan Republic in tax year until the end of the same tax year provided that directly next tax year the specified person is nonresident of the Azerbaijan Republic.
184.108.40.206. any legal entity founded and performing business activity or with the management place in the Azerbaijan Republic according to the legislation of the Azerbaijan Republic. In this Article the place of management of the legal entity is meant as the place of the main activities in which the commercial decisions necessary for implementation of management and in which daily practical control, regardless of the location of the main control facilities is exercised are made.
220.127.116.11. person having the diplomatic or consular status in the territory of the Azerbaijan Republic and members of his family;
18.104.22.168. the employee of the international organization which underwent in the appropriate order state registration in the territory of the Azerbaijan Republic or person performing public service of foreign state in the Azerbaijan Republic and members of their families;
22.214.171.124. person whose purpose is only movement from one foreign state to other foreign state through the territory of the Azerbaijan Republic;
126.96.36.199. Articles 188.8.131.52 and 184.108.40.206 of this Code do not concern to persons performing business activity in the territory of the Azerbaijan Republic;
220.127.116.11. the diplomatic representations which are in the territory of the Azerbaijan Republic, consular establishments and other official representations of foreign states having diplomatic privileges and immunity, the international organizations and their representations, and also representative offices of the foreign organizations and firms which are not engaged in business activity;
18.104.22.168. other persons to whom the concept of resident does not extend.
22.214.171.124. spouse (spouse);
126.96.36.199. parents, children, adoptive parents and adopted, grandfathers, grandmothers and grandsons;
188.8.131.52. native (summary) sisters (brothers);
184.108.40.206. nephews and nieces;
220.127.116.11. sisters, brothers and parents of spouses;
18.104.22.168. spouses of sisters and brothers;
22.214.171.124. sisters (brothers) of parents;
126.96.36.199. guardians and wards, if they owing to joint housekeeping are connected with each other as parents and children.
13.2.8. Goods - any material or non-material property (asset), including electrical, heat energy, gas and water.
For the purposes of the value added tax (VAT) intangible assets, money and the earth goods are not recognized.
13.2.9. Intangible assets - intellectual property items, including trademarks, other objects of industrial property, and also other similar rights recognized by objects of the property right of the taxpayer according to the procedure, established by the relevant legislation.
13.2.10. Representation of goods - transfer of property on goods to other persons, including without limitation it, sale, exchange, donation of goods, payment in natural form of the salary and other payments in natural form, and also assignment of rights of property on the pledged goods to the pawnbroker or other person, alienation by persons who are engaged in activities for construction of buildings, residential and non-residential premises for the agreements signed with assurance of notarial procedure and also without assurance of notarial procedure and also according to the decision of general meeting of members of housing cooperative. The subsequent assurance of purchase and sale agreements on representation by persons who are engaged in activities for construction of buildings, residential and non-residential premises in notarial procedure with the same person is not considered taxable representation for the purposes of this Article.
13.2.11. Service (work) - activities which are not considered provision of goods and which results have material expression.
For the purpose of the VAT are excluded transfer of property on money and the earth to another, and also rendering services to the employer in the form of hired employee.
If the goods used when rendering services (performance of works) are not provided separately or the compensation expenses which are not included in the cost of service (work) are not shown separately in the agreement or payment documents, such goods or expenses are considered as the integral component of service (work).
13.2.12. 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. In case of allocation from the buildings which are under construction persons who are engaged in activities for construction of buildings, residential and non-residential premises to the state, turnovers from representation of the residential and non-residential premises allocated to the state are not considered as the income, taxable.
Non-operating incomes - the income from participation in the form of the unitholder in activities of other companies, the income obtained from the stocks owned by the company, bonds and other securities and also other income gained from the transaction which is not connected directly with production and sales of goods and services (works) including the amount received in the form of penalty and compensation of damage, the increased exchange difference on foreign currency transactions, the amounts of creditor and depositor debts with the limitation period delayed according to the legislation.
13.2.13. The name of the taxpayer, buyer, customer or any person - the name of the legal entity which underwent state registration, name, middle name, surname of physical person.
13.2.14. Financial services:
188.8.131.52. provision (or issue) and return of the credits, transactions on financial leasing, credit providing and any mortgage or lombard providing in credit and monetary transactions; including management of the credits and credit providing with person who granted these loans and credit providing;
184.108.40.206. the transactions connected with management of deposits and customer accounts, payments, transfers, debt obligations and means of payment;
220.127.116.11. the transactions connected with the address of currency, money and bank notes (except numismatics objects) which are legal tender currencies;
18.104.22.168. the transactions connected with the circulation of shares, bonds, certificates, bills of exchange, checks and other securities. Services in collection or in storage or ensuring safety of banknotes, securities or other values do not carry to financial services;
22.214.171.124. the transactions concerning transactions with means of refinancing, forward contracts, options and similar agreements.
126.96.36.199. the services connected with management of investment funds.
188.8.131.52. transactions of insurance and reinsurance, and also service of insurance agent and insurance broker in connection with these transactions.
13.2.15. The dividend - the payment in cash or other form made by the legal entity for benefit of the founders (unitholders) or shareholders in connection with distribution of net profit (the income less taxes and expenses payers of the simplified tax), including distribution of the property (assets) which is created by net profit in case of liquidation of the legal entity and also return within the share par value (shares) increased by net profit.
Income gained as a result of the Section of property in connection with liquidation of the legal entity (excepting the property which is created for the retained earnings account), and also the payments connected with distribution of shares without change of percentage ratio of shares of shareholders and with withdrawal of shares (parts, shares) within their nominal value (except for the growing share par value (shares) for the retained earnings account), the dividend are not recognized.
184.108.40.206. income from wage labor in the Azerbaijan Republic;
220.127.116.11. the income from provision of goods by the producer which are made in the Azerbaijan Republic;
18.104.22.168. income from provision of goods, performance of works and rendering services in the Azerbaijan Republic;
22.214.171.124. entrepreneurial income, the Azerbaijan Republic concerning permanent mission in the territory, including the income from provision of uniform or similar (similar) goods (works, services) which can be referred to goods (to works, services), provided by means of such permanent mission, and also the income from activities which can be referred to the activities performed by means of permanent mission or from activities, similar to it;
126.96.36.199. the income connected with business activity in the territory of the Azerbaijan Republic:
• from write-off by creditors of debts of the taxpayer;
• from provision of the fixed assets included in the income according to Article 114.7 of this Code;
• from compensation of costs or reduction of reserves according to Article of 141 of this Code;
188.8.131.52. the income from legal resident person in the form of dividends, and also the income from sale or concession to other person of share in this legal entity.
184.108.40.206. the income in type of the percent received from residents;
220.127.116.11. the pension paid by resident;
18.104.22.168. the income in type of the percent received from the face having permanent mission or property in the territory of the Azerbaijan Republic - if the debt of the specified person on these percent is connected with such permanent mission or property;
22.214.171.124. the income in type of the royalty levied for storage or use of property in the Azerbaijan Republic or the income from provision of property which is specified in Article 13.2.23 of this Code and is stored or used in the Azerbaijan Republic;
126.96.36.199. the income from leasing of the personal estate used in the Azerbaijan Republic;
188.8.131.52. income from real estate in the Azerbaijan Republic, including income from provision of share in this property;
184.108.40.206. the income from provision of shares or share of the company which part of assets exceeding 50 percent directly or indirectly consists of real estate in the Azerbaijan Republic;
220.127.116.11. other incomes from provision of property which is not connected with business activity of resident;
18.104.22.168-1. direct and indirect payments to persons founded (registered) in the countries with the preferential taxation, stipulated in Article the 128th of this Code, including branches and representations in other countries and also on bank accounts in the countries with the preferential taxation made by permanent missions of residents and nonresidents in the Azerbaijan Republic. For the purposes of this Article the main amount (without percent) the debt which is paid off on the obtained loans does not belong to profit at the Azerbaijani source. Provisions of this Article do not extend to the correspondent accounts opened by resident banks;
22.214.171.124. the income from rendering managerial and financial services - if this income is paid by the permanent mission of legal resident person or nonresident which is in the territory of the Azerbaijan Republic or is received under the agreement signed with such company or its permanent mission;
126.96.36.199. the income paid according to the insurance contract or risk reinsurances in the Azerbaijan Republic;
188.8.131.52. the income from telecommunication or transport services when implementing international telecommunication or international carriages between the Azerbaijan Republic and other states;
184.108.40.206-1. payments in connection with activities in the Azerbaijan Republic in the sphere of culture, art, theater, cinema, radio, television, music, fine arts, sport, engineering, architecture, architecture and science;
220.127.116.11. the other incomes gained in connection with activities in the Azerbaijan Republic, which are not covered by the previous Articles of this Code. In case of determination of source of the income according to this Article are not considered the place of payment of the income, and also how it is paid - directly or indirectly.
13.2.17. Fixed assets - tangible assets which term of use exceeds one year which cost exceeds 500 manats and which are subject to depreciation according to article 114 of this Code.
13.2.18. Percent - any payment connected with debt obligations; including payment for loan granting (loans) or deposits (accounts);
13.2.19. Net profit - profit which remains after deduction of the income tax;
13.2.20. The participant - the shareholder, the unitholder or other participant in profit of the company.
13.2.21. Property - any personal property or the real estate, including intangible assets, current assets and other objects of the property right.
13.2.22. Residual cost of property - the original cost of fixed assets reduced by depreciation amount, added on these fixed assets.
13.2.23. Royalty - payments in the form of remuneration for use of copyright or for provision of rights to use on literary works, arts or sciences, the software, movies and other intangible assets, for any patent, trademark, design or model, the plan, confidential formula or process, information concerning industrial, commercial or scientific experience for use of the industrial, commercial or scientific equipment or assignment of rights of use on it.
13.2.24. The control cash register - the electronic equipment or computer systems which are used for registration of calculations by provision of goods (works, services), having fiscal memory and in accordance with the established procedure registered by tax authorities.
13.2.25. The forward contract - the agreement confirming the obligation of person to acquire (to sell) securities, goods or money in certain time and under certain conditions in the future at the price fixed at the time of the conclusion of such forward contract.
13.2.26. The option - the document confirming the right to acquire (to sell) securities, goods or money under certain conditions in the future on the selling price fixed by the time of the conclusion of such option or by the time of such acquisition according to the decision of the parties.
13.2.27. Non-commercial activities - implementation of the activities which are not forbidden by the law which do not pursue the aim of commercialization and provide use of the gained income only in non-commercial purposes, including for the purposes of the charter, otherwise such activities are recognized commercial.
13.2.29. Commodity export - export from the territory of the Azerbaijan Republic of goods which according to the customs legislation are recognized export goods.
13.2.30. Re-export of goods - commodity exportation which according to the customs legislation are recognized the re-exported goods which person importing them exports without their presentation after import and in the same condition in which they were at the time of import.
13.2.31. Commodity import - import to the territory of the Azerbaijan Republic of goods which according to the customs legislation are recognized import goods.
13.2.32. Reimport of goods - commodity importation which according to the customs legislation are recognized the reimported goods which person which was exporting them imports without their presentation and in the same condition in which they were at the time of export.
13.2.33. Transit through the territory of the Azerbaijan Republic - transportation on the territory of the Azerbaijan Republic according to the procedure, established by the customs legislation, between two Items on border of the Azerbaijan Republic.
International delivery - transportation by different types of transport of freights, passengers, baggage and mail on the basis of carriage documents between the point of departure (appointment) located in the Azerbaijan Republic and the destination (departure) located in other state.
13.2.34. Wage labor - the labor activity performed under the agreement (contract) with payment according to the labor law. For the purposes of of this Code person working on hiring hereinafter is referred to as as "worker", person paying the services rendered by such physical person as the worker - "employer", and such payment - "compensation".
13.2.35. Charity - the activities performed by physical person and (or) charitable organization and consisting of direct disinterested aid, including non-paid money transfer, to the physical persons needing financial or other support, or directly to the organizations, giving similar help including charitable, or the scientific, educational or other activities performed for the sake of public concerns if other is not provided by this Code. Assistance is not recognized the following cases charity:
18.104.22.168. if person receiving the similar help accepts in the face of, giving this help, the obligation of property or non-property nature (except obligations about target use of the received means or property);
22.214.171.124. if person receiving the help, and person giving help are recognized affiliated persons;
126.96.36.199. if similar help is given to any physical person or legal entity for participation in the election campaign;
13.2.36. Charitable organization - the non-profit organization performing charity.
13.2.37. Business activity - the activities performed by person independently which main objective consists in generation of profit (the income in the relation of individual entrepreneurs) from use of property, provision of goods, performance of works or rendering services.
13.2.38. State-financed organization - non-profit organization which activities are fully or partially financed by budgetary funds according to the budget estimate and which has no settlement account.
13.2.39. The company - for the purposes of of this Code of the company are the structures performing business activity and created for such activities namely:
188.8.131.52. the legal entities created according to the legislation of the Azerbaijan Republic;
184.108.40.206. the legal entities created according to the legislation of foreign state (corporations, the companies, firms and other similar structures), and also their branches or permanent missions;
220.127.116.11. branches, structural divisions or other separate divisions of the legal entities specified in Article 18.104.22.168. of this Code, having separate balance, current or other accounts.
13.2.40. the deposit account VAT - single treasury account on which the transactions connected with receipt, accounting, movement of the VAT and its transfer in the government budget are made.
13.2.41. The commercial legal entity - the structure determined in this way by the Civil code of the Azerbaijan Republic.
13.2.41-1. The legal entity of the public law - the structure determined in this way by the Law of the Azerbaijan Republic "About legal entities of the public law".
13.2.42. The non-commercial legal entity - the structure determined in this way by the Civil code of the Azerbaijan Republic.
13.2.43. The gamblings held in connection with sports – games which are held by the operator of the gamblings held in connection with sports are based on preliminary forecasting of outcome of sports meets or events in sports meets and provision to the participants who made the correct assumptions, cash bonuses (prize) based on previously declared criteria.
13.2.44. The operator of the gamblings held in connection with sports – the legal entity accredited according to the procedure, the stipulated in Clause 53-1 Law of the Azerbaijan Republic "About physical culture and sport" for the purpose of carrying out the gamblings held in connection with sports.
13.2.45. The seller of the gamblings held in connection with sports – the person performing activities according to the agreement signed with the operator of the gamblings held in connection with sports, and providing all communication between participants of gambling and the operator of the gamblings held in connection with sports in contact with the central system of totalizator.
13.2.46. The third party – the resident or the nonresident concerning whom tax authorities make the cameral or exit check which is directly connected with provision of goods (works, services) in activities of the taxpayer.
13.2.47. Tax risks are probability of approach for the taxpayer of financial losses owing to the wrong determination of the tax liabilities for any reason.
13.2.48. Minimization of tax risks – reducing or elimination of negative impacts on full or partial implementation of tax charges of the taxpayer.
13.2.49. The agreement on tax partnership – the agreement of intent which is voluntarily concluded between tax authority and the taxpayer for the purpose of minimization of tax risks;
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. The voluntary statement - 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, and also the obligation on fees on compulsory national social insurance, unemployment insurance and compulsory medical insurance;
13.2.51. The company with special tax regime – taxpayers who act within agreements or the laws on the equity Section of production approved by the law, the main export pipeline and other similar agreements and the laws, including the laws on oil and gas, oil and gas activities for the purpose of export and special economic zones and to whom during certain period for the purpose of the taxation and tax control special rules of charge and tax payment, and also diplomatic and similar representations located in the territory of the Azerbaijan Republic, consular establishments and other official representations of foreign countries are applied.
13.2.52. The resident of the industrial park - the legal entity or the physical person who is engaged in business activity without formation of legal entity which received the registration certificate of the industrial park according to the procedure, established by relevant organ of the executive authority, and performs activities in the industrial park.
13.2.53. The resident of the technological park - the legal entity or the physical person who is engaged in business activity without formation of legal entity which received the registration certificate of the technological park according to the procedure, established by relevant organ of the executive authority, and performs activities in the technological park.
13.2.54. the building - the construction object with the closed volume and spatial structure provided for accommodation, activities of people, their protection against impact of the nature, provision by it of social, cultural and household services, placement of floor spaces, storage of material values;
13.2.55. trading activity - business activity in connection with provision of goods, except for provisions of self-produced goods by producers;
13.2.56. activities for public catering - business activity in connection with provision to the buyer of the food (food) products made (prepared) with consumption purpose in the territory of object of servicing in which these activities, or in exit procedure are performed;
13.2.57. the moment of the beginning of installation and construction works - the moment of the direct beginning of installation and construction works on construction of the construction object provided in the project of construction object on which construction permission, and also in the architectural and planning Section of the project of construction object to which notifying production with observance of requirements, stipulated in Article 80.4 Town-planning and construction codes of the Azerbaijan Republic is applied is issued.
13.2.58. the document on encouragement of investments - the document which is issued to the legal entities and business owners performing investing activities, according to the procedure established by relevant organ of the executive authority, and is the basis for receipt of the privileges provided by Articles 102.1. 23, 106.1.17, 164.1.26, 199.11 and 207.5 of this Code (taking into account Article 67-2 of this Code) and the Law of the Azerbaijan Republic "About customs tariff";
13.2.59. supervision body behind the financial markets - the structure created by relevant organ of the executive authority for the purpose of implementation of regulation and control in the financial markets.
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 the 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:
22.214.171.124. 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;
126.96.36.199. 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, with submission of the receipt or check of the control cash register (upon the demand of the legal entities and physical persons performing business activity);
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 representation of electronic delivery note 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. the transfer price - the price determined in transactions between persons specified in Article 14-1.2 of this Code which shall correspond to the prices enshrined in comparable transactions between impartial persons on the same conditions;
13.2.66. financial institution - for the purposes of of this Code, the taxpayer performing at least one of the following types of activity:
188.8.131.52. banking activity;
184.108.40.206. activities for accumulative and (or) annuitentny life insurance;
220.127.116.11. 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 below-specified periods, then storage of financial assets it is considered constituting considerable part of organization activity:
18.104.22.168.1. 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;
22.214.171.124.2. period of implementation of activities of the company;
126.96.36.199. the trading activity performed for the client or on behalf of the client on securities (bills of exchange, the depositary receipt and other), to derivative financial instruments, rate, interest rate of foreign currencies and index tools or according to commodity futures;
188.8.131.52. activities for management of portfolios of investors;
184.108.40.206. the activities performed by the legal entity managed by person who is engaged in any type of activity specified in Articles 220.127.116.11 - 18.104.22.168 of this Code;
13.2.67. tax monitoring at financial institutions - control measures behind observance of requirements of international treaties as which party the Azerbaijan Republic acts, providing exchange of tax and financial data between financial institutions;
13.2.68. electronic audit - the tax audit which is carried out with creation of possibility of direct or remote access by means of the special software to the financial (accounting) data of the taxpayer stored electronically;
13.2.69. tax advantage - tax avoidance in terms and in the amount, established by this Code, without change of the actual economic indicators of taxable transaction;
13.2.70. the scheme of evasion from tax - the transaction or the transaction which are carried out in any form for the purpose of receipt of tax advantage;
13.2.71. the actual economic indicator of taxable transaction - the amount, amount (batch amount), term of accomplishment and condition of taxable transaction;
13.2.72. electronic office - the individual electronic page created in information system of the body (structure) determined by relevant organ of the executive authority based on the contract between tax authority and the taxpayer in the form established by body (structure) determined by relevant organ of the executive authority, allowing to enter by means of the code password issued by tax authority and providing exchange of information between the taxpayer and tax authority;
13.2.73. the center of economic interests - the location of business entity (object) who in comparison with other business entities (objects), including with production sites, more participates in forming of the income of the taxpayer from its activities, irrespective of the location of the main monitoring bodies of the taxpayer including the location of production site;
13.2.74. the capital - net assets value of the taxpayer after deduction from assets of all obligations;
13.2.75. obligatory marking - the codes of obligatory marking and other protective elements applied to goods for the purposes of tax control over import, production, sale and turnover of these goods, determined by the body (structure) determined by relevant organ of the executive authority;
13.2.76. excise stamp - the control brand pasted on paper on excise goods for the purpose of implementation of tax control over import, production, sale and turnover of these goods;
13.2.77. innovative activities - the activities directed to creation and accomplishment of new or advanced goods (works, services), engineering procedure on the basis of implementation of research and development works and their results for the purpose of receipt of economic or social benefit;
13.2.78. the MSP cluster company - the legal entity answering to criteria, the established body (structure) determined by relevant organ of the executive authority and the keeping development of micro, small and medium business to which with coordination with body (structure), determined by relevant organ of the executive authority, the certificate of the MSP cluster company is granted;
13.2.79. the participant of cluster of MSP - the legal entity or physical person which signed the contract with cluster of MSP for activities in cluster of MSP, keeping development of micro, small and medium business to which the body (structure) determined by relevant organ of the executive authority grants the certificate of the participant of cluster of MSP;
13.2.80. startup - the business activity answering to criteria, the established body (structure) determined by relevant organ of the executive authority, keeping development of micro, small and medium business, and performed on the basis of innovative initiative by persons to whom the body (structure) determined by relevant organ of the executive authority issues the certificate "Startup".
13.2.81. bestovarny transaction - the transactions found during measure of tax control, which are carried out for the purpose of concealment of other transaction and drawn up for the purpose of profit earning without the actual representation of goods, works and services;
13.2.82. the risk taxpayer - the person corresponding to criteria, the approved body (structure) established by relevant organ of the executive authority, including making bestovarny and (or) risk transactions. The decision that the taxpayer is risk taxpayer, and also on exception it from the list of risk taxpayers is accepted by the body (structure) established by relevant organ of the executive authority;
13.2.83. group of multinational companies - group of companies which includes two and more companies which are resident in the different countries or the company which is resident in one country and functioning in other country through permanent mission. This company, affiliated and dependent enterprises of this company, and also its branches and representations are implied by "the company entering into group of multinational companies";
13.2.84. sales of goods with export mark - sale of goods by producers to exporters for the purpose of export, according to the procedure, determined by the body (structure) established by relevant organ of the executive authority.
14.1. Market price is the price of goods (work, service) which developed as a result of interaction of the demand and supply.
14.2. If other is not provided by this Article, for the purposes of the taxation the price of goods (works, services) fixed by the parties in transaction (transaction) is agreed. If the return is not proved, this price is agreed as market.
14.3. Calculation of taxes taking into account market price can be performed:
14.3.1. when making barter (goods exchange), import and export transactions;
14.3.2. when making economic transactions between affiliated persons;
14.3.3. if the price level applied by taxpayers to goods (works, services) of one property or sort taking into account requirements of Article 14.6.1 of this Code within 30 days for more than 30% differs (below and above) from price level, developed in the market in case of the corresponding transactions on the same goods (works, services);
14.3.4. in case of proprietary insurance of the company on the amount over its residual cost;
14.3.5. in need of determination of the amount of the monthly rent for the purposes of the real estate taxation (except for the dwelling stock which is not used for the purposes of business activity);
14.4. Market price is determined until sale of goods (work, service), but no later than 30 days from the moment of provision of goods (work, service) by the prices which developed for the next date (to or after) in case of the corresponding transactions on identical (similar) goods (works, services). At the same time market price of security is determined by the quotation of stock exchange for identical securities of the same issuer for the next prior date from the moment of realization of this security provided that these quotations were announced according to the above-stated procedure.
14.5. In case of determination of market price transaction between the affiliated persons determined by article 18 of this Code can be taken into account only if their relations did not affect result of such transaction.
14.6. If application of provisions of Articles 14.4 is not possible. and 14.5. of this Code, market price of goods (work, service) is determined according to requirements of this Article. At the same time regular production costs of goods (work, service) and (or) on its realization (purchase price or residual cost), costs on transportation, storage, insurance, etc., and also regular are considered in case of transactions between not affiliated persons of the allowance and discount, the considering factors of the demand and supply.
The specified discounts are considered also when losing by goods of quality or other consumer properties or in case of the expiration (approach of date of the expiration) of expiration date and in other similar cases.
14.6.1. In case of determination of market prices of goods (works, services), the following factors which can influence the prices are considered:
22.214.171.124. amount (consignment amount) of the delivered goods (the performed works, the rendered services);
126.96.36.199. term of accomplishment of obligations, payment terms;
188.8.131.52. the shift in demand on goods (works, services) and offers (including seasonal fluctuation of demand of consumers);
184.108.40.206. country of goods' origin, place of purchase or provision;
220.127.116.11. delivery conditions of goods (works, services);
18.104.22.168. quality level of goods and other indicators of consumption;
22.214.171.124. in connection with the pursued marketing policy carrying out on the market of the new, not having analog goods (works, services), or carrying out of goods (works, services) on the new markets, provision of commodity samples for the purpose of acquaintance of consumers with them;
126.96.36.199. in case of determination of market prices on performance of works, rendering services, including in the sphere of repair, constructions, installation works, transport, lease, education, medical services and other spheres, are considered the territory of performance of works, rendering services, their qualitative indexes and other circumstances which can influence the prices.
14.6.2. In case of determination of the prices in connection with goods quality (works, services) below market the quality level is confirmed by the competent person.
14.6.3. If on corresponding commodity (works, services) the market with similar or uniform goods (works, services) any operations are not performed, it is impossible to collect data on market prices of these goods (works, services) from official and open sources, the following evaluation methods can be applied:
188.8.131.52. Based on the subsequent (secondary) selling price. Market price of goods (works, services) is determined based on the subsequent (secondary) selling price of these goods (works, services). Market price is determined with deduction from the subsequent selling price of the applied allowances.
184.108.40.206. Based on method of accumulating of cost. Market prices are estimated in accumulating of costs and the profits motivated with person providing goods (works, services).
220.127.116.11. If one of the methods specified in this Article cannot determine market prices of goods (works, services), market prices are determined by the expert involved based on the agreement.
14.6.4. The determined market prices are used only for the purposes of the taxation and goods (works, services) considered on the actual selling price according to the procedure, stipulated by the legislation.
14.6.5. If the purchase price of the purchased goods (works, services) is higher than 30 percent from market prices and their cost belongs on the costs subtracted from the income, the cost of these goods (works, services) belongs on the costs subtracted from the income at market prices, and taxes are recalculated in the following cases:
18.104.22.168. if superficial increase in the actual purchase value of the purchased goods (works, services) is revealed;
22.214.171.124. if it is impossible to determine the supplier of the goods (which performed work, rendered service).
14.6.6. If price level, applied to the provided goods (works, services) of taxpayers, appears much lower than 30 percent from the market prices determined based on of this Code, then taxes are accrued based on market prices and if is higher, then at actually provided prices.
14.7. Set of the transactions corresponding to delivery of goods by each party (works, services) and to obtaining instead of other goods (work, service), makes transaction on exchange of goods (works, services). Market prices of the specified transactions of goods (works, services) delivered (bought) during are determined according to provisions of this Article.
14.8. The taxpayer has the right to provide in the state tax authority of the proof that market price of goods (work, service) in this or that transaction is established according to the procedure excellent from specified in this Article.
14.9. In case of determination and fixing of market price of goods (work, service) official sources of information on market prices of goods (works, services) and about stock exchange quotations, databases state and regional authorities, the information provided to the state tax authorities by taxpayers or data of advertizing sources and other corresponding data are used.
14:10. By provision (except for export) and purchase of goods (works, services), the prices for which are regulated by relevant organ of the executive authority, for the purposes of the taxation the prices established by relevant organ of the executive authority are assumed as a basis.
14-1.1. In the absence of the compared data on separate transactions and (or) in case of impossibility of obtaining from official and open sources of price information of goods (works, services), provided between other persons, except for persons specified in Article 14-1.2 of this Code, transfer price is established on the basis of one of the following methods:
14-1.1.1. on the basis of the subsequent (repeated) selling price established according to the procedure, specified in Article 126.96.36.199 of this Code;
14-1.1.2. on the basis of method of addition of the cost established according to the procedure, specified in Article 188.8.131.52 of this Code; the operation performed among other persons, except for persons specified in Article 14-1.2 of this Code;
14-1.1.4. on the basis of profit distribution method. According to this method transfer price of goods (works, services) is established on the basis of comparison of specific weight of the profit got during transactions between persons which are the members of group of the same company specified in Article 14-1.2 of this Code, each of the parties from these transactions in the comprehensive income got by group from these transactions with the identical indicator which is created within the operation available to comparison performed among other persons, except for persons specified in Article 14-1.2 of this Code.
14-1.1.3. on the basis of profitability method. Transfer price of goods (works, services) is established by this method on the basis of comparison of specific weight of the profit got by person which is the party of transaction in its total expenses or the income, or total cost of assets with the price indicator which is created within available to comparison by inakovy indicator, created within the operation available to comparison performed among other persons, except for persons specified in Article 14-1.2 of this Code.
14-1.2.1. between the resident of the Azerbaijan Republic and nonresident persons who are interdependent with it;
14-1.2.2. between permanent mission of the nonresident in the Azerbaijan Republic and this nonresident or his representation, branch and other division, any other person interconnected with this nonresident and located in other state, located in other countries;
14-1.2.3. between permanent mission of resident and (or) nonresident of the Azerbaijan Republic in the Azerbaijan Republic and the subjects founded (registered) in the countries with the preferential taxation.
14-1.3. If the prices applied by the taxpayer to goods (to works, services), provided to them during transactions which is carried out between persons provided in Article 14-1.2 of this Code below lower limit of the prices created in identical conditions for identical transaction between other persons, except for persons, specified in Article 14-1.2 of this Code, taxes are accrued on transfer price and if they are higher than upper limit, then are charged on the actual selling price.
14-1.4. Transfer the difference which resulted from use of the prices are also used for the purposes of the income tax (income).
14-1.5. If purchase price of goods purchased (works, services) is above the top price created in identical conditions for identical transaction between other persons, except for persons specified in Article 14-1.2 of this Code and if their cost is carried to the expenses subtracted from the income, then the cost of these goods (works, services) belongs to the expenses subtracted from the income on transfer price, and taxes are accrued anew.
14-1.6. In case of determination of the criteria able to make impact on the prices during use of transfer price, provisions of Article 14.6.1 of this Code are applied.
14-1.7. The taxpayer has the right to produce the evidence about establishment of transfer price of goods (works, services) according to the procedure, other than the procedure specified in this Code.
14-1.8. In case of establishment of transfer prices of goods (works, services) the sources of official data on stock exchange quotations, the data provided by the taxpayer to tax authority, this from the reports placed in open data sources and other relevant data are used.
14-1.9. The procedure for establishment and use of transfer prices is established by relevant organ of the executive authority.
15.1. The taxpayer has the right:
15.1.1. obtain from tax authorities free written information on the taxes and regulatory legal acts regulating procedure and conditions of their payment operating in place of registration (accounting) on the rights and obligations of taxpayers, on powers of tax authorities and their officials;
15.1.2. receive from tax authorities written explanations concerning application of the legislation on taxes;
15.1.3. use tax benefits in the cases and procedure determined by this Code;
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