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Simplified tax eligibility rules revised under amendments to Azerbaijan’s Tax Code

29 December 2025 14:26 (UTC +04:00)

The right to be a payer of simplified tax will be determined in a new manner, APA reports.

This is reflected in the amendments to the Tax Code approved by President Ilham Aliyev.

According to the law, when determining the volume of taxable transactions, the taxpayer's turnover formed on the basis of non-cash payments made through POS terminals for retail trade and services provided to persons not registered with the tax authority will be taken into account by applying a coefficient of 0.5.

It should be noted that persons who are not registered for value-added tax (VAT) purposes and whose volume of taxable transactions does not exceed 200,000 manats in any month (or months) of a consecutive 12-month period are entitled to become simplified tax payers.

Thus, when determining the right to be a simplified tax payer, the taxpayer’s turnover generated from retail trade and services provided to persons not registered with the tax authorities, based on cashless payments made via POS terminals, will now be taken into account by applying a coefficient of 0.5.

In other words, despite the increase in prices of goods and services and in the population’s monetary income since 2016, the threshold set for simplified tax payers had remained at 200,000 manats for any 12-month period. Now, it is envisaged to double this limit to 400,000 manats, which will help discourage small and medium-sized businesses from tax evasion and increase transparency.

For simplified tax on services provided to the population, calculated on the basis of cashless payments made via POS terminals, a 6% tax rate will apply for a period of three years starting from January 1, 2026. Thus, the simplified tax rate will be reduced from 8% to 6%. Cashless payments must be made via POS terminals integrated into a unified transaction system with cash registers.

These changes will apply to taxable transactions carried out after January 1, 2026.