Tax burden on non-cash payments will be reduced for those who do not have a tax burden
- Starting January 1, 2026, catering businesses will be able to deduct 50% of their turnover from non-cash payments via POS terminals from their total VAT turnover for three years, along with a proposed reduced simplified tax rate of 6% on cashless turnover, down from 8%.
- In Example 1, a catering service with 50,000 manats in total sales (40,000 manats cashless) would see their VAT obligations decrease from 6,000 manats to 2,400 manats after applying the new regulations.
- In Example 2, a simplified taxpayer in the same situation would have their simplified tax liability reduced from 4,000 manats to 3,200 manats after the implementation of the new tax measures.
Source gov.az
- Azerbaijan has raised the effective VAT registration threshold for businesses accepting cashless payments in retail and public services.
- Only 50% of the value of cashless transactions via POS will be counted towards the VAT registration threshold.
- The change aims to encourage more businesses to adopt cashless transactions.
Source: orbitax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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