Azerbaijan Revamps Cashless VAT Payment System for Taxpayers
New Regulations for Non-Cash Transactions in Azerbaijan
Azerbaijan has implemented new regulations governing the payment methods for certain taxable transactions. Following a recent directive from the Minister of Economy, Mikayil Jabbarov, taxpayers registered for Value Added Tax (VAT) must adhere to stricter non-cash payment requirements based on their transaction volumes.
Key Changes in Payment Regulations
Starting immediately, businesses engaged in trade and public catering whose taxable transactions exceed 200,000 manats (approximately $117,647) in any month of a 12-month period are required to settle payments exceeding 2% of their previous month’s turnover exclusively through non-cash means.
For other taxpayers, any monthly transactions totaling more than 15,000 manats (about $8,823) must also be executed solely through non-cash payments.
Criteria for Non-Cash Transactions
The newly established rules include specific thresholds for non-cash payments:
- If the 2% threshold of the previous month’s turnover for goods and services is less than 30,000 manats (around $17,647), then all settlements exceeding 30,000 manats in that month must be non-cash.
- Should the threshold exceed 50,000 manats (nearly $29,411), then transactions exceeding that amount must also be completed non-cash.
Monitoring and Compliance
In addition to these guidelines, the Ministry of Economy will closely monitor service fees and municipal collections to ensure compliance with the new non-cash regulations.
The Legal Department has been tasked with submitting this decision to the Ministry of Justice within three days for incorporation into the State Register of Legal Acts.
Conclusion
These changes reflect Azerbaijan’s commitment to enhancing transparency and efficiency in financial transactions. By prioritizing non-cash payments, the government aims to reduce tax evasion and promote a more accountable economic framework.
