1. taxpayer - the simplified tax regime may mainly be chosen by:
persons not registered as VAT payers and having turnover not exceeding 200,000 manats over a consecutive 12-month period.
persons engaged in trade or catering activities with turnover exceeding 200,000 manats (in accordance with the law).
main cases where a person is considered a mandatory simplified taxpayer:
taxi and other passenger transportation.
sports betting and lottery activities.
supply of residential and non-residential premises owned by the person.
supply of land plots owned by the person.
certain individual activities without hiring employees (for example, barber, tailor, etc.).
building construction activity.
main categories not eligible for the simplified tax regime (brief):
wholesale trade.
income from rent and royalties.
production of excisable and mandatory-marked goods.
certain financial and licensed activities.
persons whose residual value of fixed assets at the beginning of the year exceeds 1,000,000 manats (exceptions may apply).
persons with an average quarterly production staff exceeding 10 employees.
2. tax object - general rule:
total revenue from the sale of goods, works and services during the quarter, as well as non-operating income.
special cases:
transportation activity: vehicle and indicators (number of seats, tonnage, etc.).
supply of immovable property: area (sq.m).
betting and lotteries: proceeds from ticket sales or commission paid to the seller.
3. taxable base - general rule:
quarterly turnover (total revenue) is taken as the base.
in special cases:
the base is area (sq.m), vehicle indicators or the amount of cash withdrawal.
4. taxable period - the reporting period is a quarter.
5. tax rate - main rate: 2 percent (on turnover).
special rates for trade and catering (in cases provided by law): 6 percent or 8 percent.
for transportation activity: fixed monthly amounts and regional coefficients.
for supply of immovable property: 15 manats per sq.m and a regional coefficient.
for betting and lotteries: 6 percent (operator/organiser), 4 percent (seller’s commission).
for cash withdrawals: 1 percent.
6. tax calculation procedure - general rule:
simplified tax = quarterly turnover x rate.
in special cases:
tax is calculated based on the fixed amount, area and coefficients established by law.
7. tax payment procedure and timing - after the end of each quarter, a tax return must be submitted by the 20th day of the following month, and the tax must be paid to the state budget.
brief note: the simplified tax is a simpler tax regime for small and medium businesses. proper application depends on VAT status, 12-month turnover, type of activity and transaction structure.
