Amount of Azerbaijan's state budget revenues from financial sanctions to change

23 April 2020 14:30 (UTC+04:00)

By Trend

Azerbaijan’s Cabinet of Ministers has introduced amendments to the Rules for the state budget preparation and execution in connection with financial sanctions, applied by tax authorities, as well as other deductions, Trend reports.

As of now, funds have been transferred to the accounts envisioned by Article 22-1 of the Azerbaijani Tax Code by reducing actual incomes for the reporting year at 50 percent of the amount of financial sanctions applied by the tax authorities and transferred to the state budget.

The proposed amendment envisions changes in the rules for transferring 50 percent of the amount of financial sanctions to the state budget. That is, the transfer of funds to the accounts provided for in Article 22-1 of the Tax Code shall be carried out by reducing the actual income for the reporting year in the amount of financial sanctions imposed by the tax authorities.

The Tax Code’s Article 22-1 envisions the following deductions for financial sanctions and other funds applied by the tax authorities.

Thus, according to the article 22-1.1, in order to strengthen the social protection of employees of the relevant executive authorities, as well as the material and technical base of the authorities, increase the scientific and technical potential in the tax sphere, a part of the amount of tax sanctions imposed by the tax authorities and received by the state budget established by the relevant executive authority, and proceeds from the sale of goods, unlabeled with excise stamps or goods labeled with forged excise stamps confiscated through court decision, shall be transferred to the accounts of the relevant executive authorities. The procedure for the distribution and use of these funds is established by the relevant executive authority.

According to the article 22-1.2, in order to strengthen material and technical base of the bodies (structures) identified by the relevant executive authority and the social protection of their employees, 50 percent of the financial sanction applied by the tax authorities for violating the requirements of Azerbaijan’ Law On Social Insurance and included in the fund provided for in article 19 of this Law shall be transferred to the accounts of bodies (structures) appointed by the relevant executive authority. The distribution of these funds and the procedure for their use are determined by the body (structure) appointed by the relevant executive authority.

In compliance with the article 22-1.3, if the amount of actual revenues of the body (structure), determined by the relevant executive authority, from incomes at the expense of sources, provided for in the forenamed law’s article 22-1.1, is less than the amount of income forecasted as per procedure prescribed by legislation on the budget system, this difference is transferred to the account of the body (structure) determined by the relevant executive authority, at the expense of funds arising from the surplus of the transfers to the state budget from the tax authorities on the state budget incomes approved each year by the Law on Azerbaijan’s State Budget (with the exception of taxpayers (contractors) operating in the oil and gas sector, revenues from the income sources of the Target Budget Fund on Motor Roads, as well as part of funds that were received by the state budget by the end of the budget year in excess of revenues, provided for by the state budget, from tax authorities distributed among cities and districts under the procedure established by the authority (structure) provided for by the relevant executive authority, and which were left at the disposal and transferred to the use of these bodies).

Following the article 22-1.4, in order to strengthen material and technical base and social protection of employees of bodies (structures) established by the relevant executive authority, 50 percent of the amount of financial sanctions applied by tax authorities for violating the requirements of Azerbaijan’s Law On Health Insurance and transferred to the fund provided for in articles 15 through 21 of this law is transferred to the accounts of bodies (structures) established by the relevant executive authority. The distribution of these funds and the procedure for their use are determined by the body (structure) established by the relevant executive authority.

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