New Tax Rates for Banking Transactions Enter into Force

Since the New Year changes in the Tax Code have taken effect, according to which tax payments in certain banking operations are determined.

According to the new rules for transferring money into the ‘electronic purse’ of non-residents by residents of the Republic of Azerbaijan, the bank conducting the operation will hold a levy of 10% of the amount of the transfer.

In addition, one percent tax will be charged for cashing money by legal entities and private entrepreneurs from their bank accounts.

The bank will also deduct VAT (18%) at the expense of the user of work or service through the electronic trading system, as well as for participation in electronic lotteries and other contests and competitions held outside Azerbaijan. In the case of a win, further 10% of this amount will be deducted. This rule does not apply to legal entities and private entrepreneurs who are in the tax records.

A bank expert explained to Turan that these changes do not apply to purchases of goods online. Meanwhile, the rules are related to the provision of various services in electronic form. For example, online purchase of a train ticket is also considered a service and is subject to tax levied. At the same time online payment for hotels and purchase of plane tickets has been excluded from this list. -71D-