CRITERIA FOR RISKY TAXPAYERS AND TRANSACTIONS ARE APPROVED
By the decision of the Cabinet of Ministers of the Republic of Azerbaijan dated July 28, 2020 (hereinafter referred to as the Decision), the criteria for risky taxpayers and risky transactions provided for in Article 13.2.82 of the Tax Code of the Republic of Azerbaijan were approved.
According to the Decision, transactions are considered risky for two types of non-compliance. One of them is the discrepancy between the assortment of goods indicated by the taxpayer in the electronic invoice submitted by the taxpayer when buying or importing goods with the assortment of goods actually purchased/imported into the country, and the second is the discrepancy in the volume of goods purchased or imported by the taxpayer into the country.
A taxpayer engaged in risky transactions is considered a risky taxpayer. In addition, i) if, as a result of tax audits, it is established that the taxpayer carries out non-commodity transactions; ii) the taxpayer conducts business as an importer, manufacturer or non-importer and does not have a warehouse registered with the tax authority or the volume of imported or purchased goods does not correspond to the area of the registered warehouse; iii) if in the course of a tax audit it is discovered that goods that do not correspond to the type of activity of the taxpayer have been provided without the appropriate documentation; iv) a taxpayer is considered a risky taxpayer if the volume of goods imported or purchased by the taxpayer for sale in the last 6 months exceeds its turnover for the relevant period by at least 3 times.
If an individual falls into the category of risky taxpayers, the legal entity headed and established by him is also considered a risky taxpayer. If a legal entity is declared a risky taxpayer, then a legal entity established by its director or founder, or a legal entity, the head of the executive body of which is a risky legal entity, are also considered a risky taxpayer. Also, risky taxpayers are individuals who are the executive body of more than five legal entities and legal entities headed by such individuals.
Note that the presence of one of the above criteria is sufficient to assess the taxpayer as risky.
Source link: “The Decision of the Cabinet of Ministers of the Republic of Azerbaijan No. 265 dated July 28, 2020”