By Aynur Jafarova
The Azerbaijani Ministry of Taxes will sign the first partnership agreements with entrepreneurs this year, Deputy Minister of Taxes Natig Amirov told journalists on June 12.
"We are open for cooperation with all companies. There are no restrictions. As soon as the appropriate regulatory documents are adopted, we will begin to meet with companies," Amirov said.
The legal framework for partnership agreements was reflected in recent amendments to the Tax Code after which the Ministry of Taxes prepared draft regulations. This package is currently being discussed by relevant organizations.
"The main purpose of introducing the partnership agreements is to strengthen mutual trust between tax bodies and entrepreneurs, as well as to minimize the number of audits of taxpayers," Amirov said.
Speaking at a conference organized by the Ministry of Taxes and the American Chamber of Commerce in Azerbaijan (AmCham) in Azerbaijan, Amirov said that while introducing partnership agreements, the Ministry of Taxes intends to share the responsibility for tax collection with entrepreneurs.
Addressing the conference, Director of the General Directorate for Tax Policy and Strategic Studies of the Ministry of Taxes Akif Musayev said this is being done with the purpose to increase accuracy of tax calculations and ensure better risk management, he said.
He added that the basic principle of this novelty is to work on a voluntary basis and under mutual trust.
The next amendments to the Tax Code of Azerbaijan will cover the promotion of non-cash payments and restriction of cash payments, Deputy Minister Natig Amirov told journalists.
"This package is being discussed with the corresponding state bodies. The developed proposals cover wider layers of the population, they can be called a package of measures that stimulate non-cash payments. We believe that they will be put on discussion at the end of the year and, if accepted, will be implemented next year," he said.
Taking into consideration that the increase in the volume of non-cash payments is one of the main sources of a significant expansion of the taxable base, Azerbaijan intends to reach the level of leading European countries in this regard in the near future.
The proposals envisage partial exemption from taxation of the turnover of business entities that is carried out in the non-cash form, as well restrictions on buying and selling operations under one deal or for a specified period of time.
Tax violations reduced
The Ministry of Taxes has reported a declining trend in the number of tax violations by large taxpayers.
"Compared to last year, the number of violations of law and tax evasion by the largest taxpayers has tended to go down. On the contrary, an increase in the number of such violations is being observed among small taxpayers that pay taxes through a more simplified system," Amirov told journalists.
According to him, the ministry has prepared a program to inform and train taxpayers to prevent the growth of tax violations.
The amount of tax debt decreased by 7.5 percent in Azerbaijan in the first quarter of 2013 compared to January and by 16.3 percent as compared to the same period of last year.
Law on protection of businessmen's interests
Azerbaijan's parliament will adopt a law "On protection of the interests of entrepreneurs and regulation of controls exercised in the entrepreneurship sector", chairman of the Azerbaijani parliament's economic policy committee Ziyad Samadzade said addressing the mentioned conference.
The main goal of the bill is to form single principles of control over entrepreneurial activity as well as to stop illegal interference with the activity of entrepreneurs during the exercising of controls. According to the draft law, an audit which is not relevant to the requirements of this law does not have legal force.
The draft law aims to improve the business environment in the country and to create favorable conditions for the work of entrepreneurs, Samadzade said.
According to the bill, while implementing the controls business entities will be divided into groups with high, middle and small risk. The entrepreneurs who didn't commit violations of law for a certain period of time will be moved to the group with small risk. The duration of planned audits over the large entrepreneurs should not exceed 10 days and those over middle and small entrepreneurs - five days, while unplanned check-ups of large entrepreneurs should not exceed five days and those of middle and small entrepreneurs - three days.
The draft law also envisages that unplanned check-ups will be conducted not at the will of the supervising body but only in specific cases stipulated by law.
Online registration of businesses
About 40-50 percent of commercial legal entities are registered at the tax bodies via the Internet, Ministry of Taxes official Natig Shirinov told journalists.
According to him, this indicator can improve Azerbaijan's position in the Doing Business 2014 report.
It is also important to develop legislation framework to commence the online registration of foreign legal entities. After its development the Ministry of Taxes will be able to register them online, Shirinov said.
Earlier Deputy Minister of Taxes Sahib Alekperov told Trend news agency that slow progress in the application of electronic signatures is the main obstacle for wider registration of legal entities in Azerbaijan. According to him, it would be rational to register non-resident legal entities as well.
"Currently it is a difficult issue for us. This requires an appropriate level of digitalization. Such a project is available and we are working on it. This is a matter of one or two years," Alekperov said.
According to the State Statistics Committee, 5,417 legal entities were registered in Azerbaijan in 2012, including 154 state-owned, 4,653 private properties, 483 enterprises with 100 percent foreign investment, 124 joint ventures, and three municipal properties.
Every three out of five enterprises registered in 2012 are located in the capital Baku.