The rule for the registration, re-registration, and deregistration for tax purposes of non-residents conducting electronic trade through the Internet information resource (“the Rule”) has been approved by the Decision No. 387 of the Cabinet of Ministers of the Republic of Azerbaijan dated October 30, 2023. According to the Rule, non-residents who provide works and services to residents through the internet information resource in the manner of electronic trade (as a seller (supplier) in the provision of services and execution of works via the Internet information resource, including downloading of electronic books, music, audio and video materials, graphic images, virtual games, software, placement of advertisements, and other similar works and services) and do not operate through a permanent establishment in the Republic of Azerbaijan (under Article 19 of Tax Code of Azerbaijan Republic)  are to be registered electronically for the purposes of VAT.

To register non-residents must submit the information and documents shown below into the platform for tax administration of electronic trade participants created in the Internet Tax Office of the State Tax Service. 

It should be noted that the platform has not yet been created and therefore the Rule is not yet implemented. We shall keep you posted once the platform is set up. 

In the meantime, please the following the information and the list of documents to be submitted to the platform for tax administration when the platform will be set up:

 1. full name;

2. the name of the country of residence;

3. legal address and actual address and post office index of the head office, 

4. website (if available);

5. e-mail address;

6. registration (incorporation) number in the state of incorporation;

7. tax registration number in the country of registration;

8. main activity area(s);

9. currency in which tax payment will be made; (AZN, USD, euro or GBP);

10. The date of commencement of activity in the Republic of Azerbaijan;

11. The details of at least two persons (surname, first name, father's name, position, email postal address and contact phone number) who will fulfill the tax obligations.

The scanned copies of the of the following supporting documents should be added to the platform:

1. document confirming registration in the state where the non-resident is registered (incorporation) or tax registration certificate in the country of origin; 

2. document confirming the appointment of a responsible person (decision, employment contract, etc.).

The State Tax Service will check the compliance of the information with the Rule within 20 business days, and upon confirmation of compliance, the non-resident is registered and provided with a TIN. Login and password are provided automatically to the non-resident to access the platform.

According to the rule, a tax return is submitted by the relevant non-residents if any of the following conditions are met:

• when the resident person receiving (purchasing) the works and services makes the payment through local banks located in the Republic of Azerbaijan, branches of foreign banks in the Republic of Azerbaijan, the national postal communication operator, or other payment service providers;

• when the resident person receiving (purchasing) the works and services is located in the Republic of Azerbaijan;

• when the IP address of the device used by the resident person to receive (purchase) the works and services is in the Republic of Azerbaijan;

• when the country code of the mobile operators used by the resident person to receive (purchase) the works and services or to make the payment belongs to the Republic of Azerbaijan.

 Registered non-residents must declare and pay VAT obligations in accordance with the Tax Code for the services provided and works performed.  

In the meantime, it also should be noted that under Tax Code of Azerbaijan the VAT should be paid at 18% applied to the value of goods or services sold. 

The reporting period for VAT is considered a calendar month. A VAT payer shall submit a VAT return for each reporting period to the tax authority no later than the 20th day of the month following the reporting period and pay the tax to the state budget.

The value of goods sold in electronic form and services rendered to individuals in foreign currency should be recalculated in AZN using the Central Bank of Azerbaijan exchange rate determined on the date of receipt of payment for the goods or services.

We hope that above said is helpful and acceptable.

We remain at your entire disposal for any information and/or assistance you should need from us. 

 For more information, please contact us at ana@mwp.kz,  ztd@mwp.kz.