High-risk taxpayer in Azerbaijan. Who is it?
- Emil Khudiyev (Lawyer)
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New concepts in tax terminology – high-risk taxpayer and high-risk transactions, have been introduced relatively recently.
To understand the meaning of these terms, it is necessary to familiarize yourself with the Tax Code of the Republic of Azerbaijan, as well as with the“Criteria of high-risk taxpayer and high-risk transactions”, approved on July 28, 2020 by Resolution No. 265 of the Cabinet of Ministers of the Republic of Azerbaijan.
Let’s consider who is a high-risk taxpayer?
Who is a high-risk taxpayer?
According to Article 13.2.82 of the Tax Code of Azerbaijan, a high-risk taxpayer is a person who meets the risk criteria approved by the Cabinet of Ministers of Azerbaijan.
The decision to include a taxpayer in the list of high-risk taxpayers and to exclude him from this list is made by the State Tax Service of the Republic of Azerbaijan. Information on high-risk taxpayers, as well as information on taxpayers excluded from the list of high-risk ones, is published on the official website of the State Tax Service.
Interesting info: When performing transactions through the electronic invoice system on the Internet Tax Service Portal, information on taxpayers recognized as high-risk is displayed in the form of notifications.
High-risk taxpayer criterias
A taxpayer may be considered high-risk if it meets one of the following criteria:
1. Carries out high-risk transactions that meet the criteria below;
2. If, during tax audit, it is revealed that the taxpayer carries out non-commodity transactions;
3. If the importer or person engaged in commercial activities does not have a registered warehouse or facility, or if the volume of goods does not correspond to the area of the warehouse (except for goods ordered and directly transferred to customers);
4. If the taxpayer provides goods that are not documented during tax audit, which do not correspond to its type of activity;
5. If the volume of imports or purchased goods over the past 6 months exceeds the turnover by more than 3 times;
6. An individual or legal entity whose founder is the director recognized as a high-risk taxpayer.
What is high-risk operations?
Transactions may be considered risky if:
1. Electronic invoices indicate goods other than imported or purchased;
2. The volume of goods provided exceeds the volume of goods purchased or imported.
How to check high-risk taxpayer?
To check whether your counterparty or business partner is a high-risk taxpayer, simply go to this website (https://www.e-taxes.gov.az/ebyn/risk.html) of the State Tax Service and enter their TIN (taxpayer identification number).
FAQ
Can the Tax Service arrange an unscheduled audit if I am a high-risk taxpayer?
Yes, in accordance with Article 38.3.8-1 of the Tax Code of Azerbaijan, if a taxpayer is high-risk, this is grounds for conducting an unscheduled audit.
Can the Tax Service publish information about risky taxpayers?
Yes. In accordance with Article 30.2 of the Tax Code of Azerbaijan
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