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FMSB, Tax Ministry agree on terms of applying e-trade taxation

10 January 2017 17:44 (UTC+04:00)
FMSB, Tax Ministry agree on terms of applying e-trade taxation

By Nigar Abbasova

Azerbaijan has recently approved certain changes to its Tax Code, while the change envisaging taxation of e-trade operations became one of the most discussed.

Financial Market Supervisory Body (FMSB) and the Taxes Ministry agreed on granting a one-month delay for the development and application of the taxation mechanism by banks, a source in the financial market told Trend.

Therefore, during January VAT will not be imposed on services purchased through e-trade.

The recently approved changes to the Tax Code of the country, in particular to Articles 168.1.5, 169.1, and 169.3 regulate the imposition of tax on online services.

The tax will be charged in the country of stay of individuals participating in online competitions and purchasing operations. Exceptions are a purchase of airline tickets and reservation of rooms in hotels by means of online services.

Tax director at PwC Azerbaijan Arif Guliyev said that the taxation of e –trade may create certain difficulties for banks. Addressing a press conference on January 10, he said that one of the problems is a lack of a system that differentiates producers of goods from providers of services.

PwC Azerbaijan’s partner for taxes and legal issues Michael Ahern, in turn, said that Azerbaijan is ahead of western countries in the taxation of e-commerce, mentioning that the volume of e-trade turnover is increasing worldwide.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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