New rules restrict the right to leave the country if tax debts are outstanding, and changes are made to the simplified tax regime.
zerbaijan (the "Amendments") was adopted, which came into effect on 1 January 2016.
Under the Amendments, a right to leave the country may be limited as a way to ensure payment of tax debts and interests, as well as financial sanctions applied due to a breach of the tax legislation. This limitation applies both to individuals and to the management of a legal entity. Interestingly, there is no differentiation of tax breaches (for instance, between minor breaches and those triggering criminal liability) for the purposes of this limitation.
The Amendments redefine the scope of (i) persons who are payers of the simplified tax ("ST"); and (ii) persons who have a right to use the ST regime. At the same time, the taxable income threshold for an enterprise that could be subject to ST is increased to AZN200,000. This is favourable for small businesses with a relatively small turnover. However, the Amendments provide increased financial sanctions for breaking the cash payment transaction rules, which apply to entities within the ST regime. Under the Amendments, persons engaged in trade and public catering (including restaurants) will also be subject to the ST at the increased rates.
The Amendments also provide an updated ST regime for persons engaged in the construction industry, depending on the location zone of the construction. Actual tax liability depends on a ratio determined for each zone within Baku or Azerbaijan.