Taxation of e-commerce can be started from 2016

/By AzerNews/

By Aynur Karimova

Azerbaijan can start taxation of e-commerce already in 2016, Azerbaijan's Deputy Taxes Minister Natig Amirov said at a press conference dedicated to the results of the first 10 months of 2015 on November 17.

He said that the draft law was submitted to the government for consideration two years ago, but so far it was impossible to reach an agreement in some points with the Ministry of Finance.

"International experience and technical support of international organizations was used during the development of the draft law," he noted. "The bill is fairly comprehensive. Last month, we again submitted it to the government for consideration and we hope that it will be adopted already in 2016."

Earlier, the Taxes Ministry reported that Azerbaijan plans to keep a record of those involved in e-commerce. The ministry told Trend that the bill does not provide for the creation of a special taxation mechanism.

At the initial stage it is suggested to keep a record of individuals and legal entities involved in e-commerce. In accordance with the current tax legislation, they have to pay value added tax [18 percent].

The Azerbaijani State Statistics Committee reported that e-commerce market volume amounted to 10.5 million manats in the country as of January-October 2015. The total volume of retail e-commerce in Azerbaijan increased by 1.9 times compared to the same period of 2014.

Some 91.9 percent of goods purchased in electronic form by the population of Azerbaijan in January-October 2015 accounted for legal entities and 8.1 percent - physical entities. Non-food items accounted for 96.3 percent of e-commerce market turnover.

AIOC's income tax payments fall short of projections

Amirov went on to add that in January-October 2015, income tax payments from the Azerbaijan International Operating Company fell short of projections by 104 million manats.

He said revenues were forecasted to reach 800 million manats, but due to falling oil prices, the oil companies' revenues declined, resulting in total income tax of 696 million manats from the consortium.

The reduced income from the oil sector was offset by increased revenues from the non-oil sector, which exceeded the forecast by 136 million manats.

“This made it possible to meet projections of tax revenues in the state budget,” the deputy minister remarked.

He said that the most difficult period is over.

“We were very concerned about how much the oil revenues from the consortia would amount,” he said. "We are very pleased that the deficit was only 104 million manats. I hope that in the remaining two months, we will fulfill our commitments and completely execute the forecast on the budget.”

The state budget revenues in the amount of 7.12 billion manats or 36.6 percent of total revenues are forecasted in Azerbaijan through the Ministry of Taxes in 2015. Some 4.81 billion manats or 67.7 percent will account for the revenues from the non-oil sector.

The revenues from the oil sector are projected at 2.3 billion manats with 32.3 percent of tax revenues. Thus, 33 percent of a total volume of tax fees will account for the value added tax, income tax - 31 percent, income tax proceeds – 13.8 percent, excise taxes - 8 percent, other taxes – 14.2 percent.

Amirov also said that as of November 1, 2015, tax arrears of Azerbaijan's state enterprises amounted to about 444 million manats.

"The overall tax debt of the country amounts to 1.368 billion manats. The remaining part (497 million manats) of tax debts accounts for the private sector," he added.