Ministry of Taxes (Azerbaijan)
|Azərbaycan Respublikasının Vergilər Nazirliyi|
Coat of arms of Azerbaijan
|Formed||February 11, 2000|
|Headquarters||16 Landau Street, Baku, Azerbaijan Republic AZ1073|
The Ministry of Taxes of Azerbaijan Republic (Azerbaijani: Azərbaycan Respublikasının Vergilər Nazirliyi) is a governmental agency within the Cabinet of Azerbaijan in charge of regulating taxes and tax collection activities in all sectors of the economy of Azerbaijan Republic. The ministry is headed by Mikayil Jabbarov.
First Tax Inspection under the Ministry of Finance of Azerbaijan Democratic Republic was established by the decision of the Parliament dated 17 June, 1919. Since then, the tax service in Azerbaijan began its activity. During the period between 1920 and 1991 tax issues in Azerbaijan SSR were regulated by the tax legislation of the Soviet Union.
With the breakup of the Soviet Union and gradual transition from command to market economy, tax collection was assigned to the newly established Tax Inspection Department within the Ministry of Finance of Azerbaijan Republic in July 1990. The department was in charge of implementation of new tax policies, collection of taxes and timely tax payments to the national budget. In October 1991, the department was closed within the Ministry of Finance for the purpose of improving supervision over compliance to tax legislation, strengthening the role of the state tax service in this area and ensuring the objectivity of its independent activities and supervision. As a result, the independent body, State Tax Inspectorate of the Republic of Azerbaijan was established.
On February 11, 2000 by the Presidential Decree, the Main State Tax Inspection was abolished and Ministry of Taxes established on its basis to ensure proper state tax policy, timely and full collection of taxes and other mandatory payments, as well as, state control over that area.
The ministry has various international agreements on tax matters with the tax) organs of the USA, France, Germany, the Great Britain, Turkey, Russia, Canada, Romania, Kazakhstan and many other states from all around the world. The Republic of Azerbaijan has also been included to the membership of Strasbourg Convention "about mutual administrative assistance on tax related issues" along with the member states of the Council of Europe. The Ministry of Taxes established relations with many of international organizations such as IOTA, OEJD, Treasurer Department of the USA, etc.
The ministry is headed by the minister aided by one first deputy and three deputy ministers. The First Deputy oversees Tax Policy and Strategic Research Department. Main functions of the ministry include improvement of economy regulation structure, increasing efficiency in collection of taxes and their proper use, accounting of the financial means being transferred to the national budget; investigation and inspection of irregularities in collection of taxes; implementation of audits in taxpaying enterprises; protection of rights of the taxpaying entities and individuals. In 2007, the ministry introduced its online collection page under State Tax Administration Improvement Program due to high economic growth with number of businesses growing rapidly for the last few years.
The Ministry of Taxes consists of following departments:
- Department of Primary Investigation of Tax Crimes under the Ministry of Taxes;
- Department of National Revenues under the Ministry of Taxes;
- Baku city Department of Local Revenues under the Ministry of Taxes;
- Baku city Department of work with Small Businesses under the Ministry of Taxes;
- Regional Tax offices and departments;
- District Tax divisions;
- Call Center Department under the Ministry of Taxes.
Training Centre of the Ministry of Taxes was established by the Decision No. 90 of the Cabinet of Ministers of the Republic of Azerbaijan as of June 5, 2002 on the basis of the Decree No. 539 on the application of the law of the Republic of Azerbaijan, on approval of the Regulation “On service in state tax authorities” signed by the late president of Azerbaijan, Heydar Aliyev. A new complex of the Training Center was inaugurated in the village of Nagarakhana of Shamakhi on September 13, 2011, with the participation of the President Ilham Aliyev. The aim of the Center is to carry out educational processes to improve the level of knowledge and vocational training of the employees of tax authorities, ensure practical work and management ability, master new technologies and techniques, as well as adapt training methods to constantly changing working conditions.
The Ministry of Taxes has been carried out different programs in order to improve tax administrations, such as State Program on improvement of tax administration in the Republic of Azerbaijan (2005-2007); Concept of development of services provided to taxpayers by tax authorities (2011-2015); Development strategy of tax system (Development Plan 2013-2020).
Duties of the ministry
The ministry of Taxes of the Republic of Azerbaijan has the following duties;
- Ensuring that state taxes and other revenues transferred to the budget of the Republic of Azerbaijan are calculated in a correct way and on time, according to the legislation on tax;
- Delivering adequate information to the tax payers about the tax legislation, and changes on it and explaining the calculation tax payments free of charge;
- Exploring legislation violations in the field of tax and its causes and within the boundaries of providing adequate measures in order the overcome that cases;
- Guaranteeing the legal interests and rights of the tax-payers;
- Carrying out several other duties defined by the legislation of the Republic of Azerbaijan.
Rights of the ministry
The ministry has the rights below for carrying out its duties:
- Conducting tax and cameral inspections according to the legislation;
- Carrying out effective control of tax-payers in a defined way by the legislation in order to define the amount of tax collection, accounting of non-marked or marked with fake trademark goods and objects, accounting of the legal entrepreneurs and the individuals busy with ownership, ensuring the legislation is followed in the payoffs with the citizens;
- Checking the account books, estimates, cashes, the all financial documents, declarations of the tax-payers and many other documents related to the calculation and payment of the taxes according to the legislation; during the inspection process it receives required explanations and references from the tax-payers or their authorized persons;
- Applying time-study techniques indicating the Tax Code of the Republic of Azerbaijan, to view store houses, production centers, trade and other houses for storage of the objects utilized for profit by the tax-payers or of the certain places imposed with taxes; taking necessary documents as samples in a defined way by the legislation;
- Ensuring that tax-payers not violating the tax legislation;
- Providing the information base and registration of market prices for the purpose of With the purpose of tax calculation considering market prices in accordance with the tax legislation;
- Calculating tax imposition base and the taxes according to related information or the direct or indirect evaluation methods in a determined way the law;
- Changing the time of tax liabilities according to the Tax Code;
- Detecting violation of the tax legislation, calculating the exact percentage of on tax-payers’ debts, imposing financial sanctions and administrative punishment on them according to the law;
- Providing the transfer of tax payments that not paid within a determined time, percentages, financial sanctions and administrative punishments to the state budget or purposive state funds in accordance with the legislation;
- Taking certain actions by taking the list of the property of the tax-payer in accordance with the law in order supplying the payment of tax debts, calculated percentages and applied financial sanctions;
- In accordance with the Law of the Republic of Azerbaijan 'about operational-research activity' carrying out the operational-research activity.
- Carrying out the examination and investigation functions in the cases and rules according to the Criminal-Practice code of the Republic of Azerbaijan;
- Involving the experts, the specialists, interpreters and observers in order to maintain control on tax in the cases and rules by the legislation;
- Making provisions in accordance with the legislation against any the activity that does not have license;
- Monitoring the realization of the cash-control apparatus and maintaining cash payment rules with the population;
- Sending an application to the a certain organ that provides licenses in order to cancel the license of the individuals busy with the activities requires specific agreement or license;
- According to the law, request the Ministry of Justice of the Republic of Azerbaijan about cancelling the state registration of the legal entities;
- Presenting a petition to the necessary organs for changing or eliminating the prices and tariffs applied in a wrong way;
- Establishing the stationery tax points for the places that requires permanent control ;
- In order to carrying the liabilities of the state tax organs, setting up or eliminate centers of education, regional tax organs according to the legislation;
- Ruling the activity of regional tax organs and other structural departments, to confirm their regulations(statues);
- Registering the applications of regional tax organs in a determined way the legislation to monitoring their activities;
- Eliminating the illegal activities and decisions the structural departments’ officials;
- In accordance with its authority to making certain decisions that are obligatory on tax payers;
- Establishing the communication and information delivery system according to the legislation;
- Carrying out many other rights that defined by the law legislation.
Single Window System
Taking into account the difficulties faced by entrepreneurs during the registration process and the low rating of Azerbaijan in the Doing Business 2007 report, the government of Azerbaijan started to implement reform in this process. For this purpose, in 2007 two presidential decrees (30 April 2007 Decree on Certain Measures Regarding the Development of Entrepreneurship in the Republic of Azerbaijan, and 25 October 2007 Decree on Measures to Ensure Organization of Entrepreneurship Activities on the Principle of Single Window) were signed. As a result, the Ministry of Taxes was designated as the principal responsible organization for registering through "single window" system. This government agency started to register business entities through its AVIS software. A number of legal acts were amended before applying "single window" principle. In consequence, new registration system does not need additional support of professional lawyers and is mainly regulated by the following legislative acts:
- "Law on State Registration and State Registry of Legal Entities ";
- Civil Code of the Republic of Azerbaijan;
- The Tax Code of the Republic of Azerbaijan;
- Methodological Guidelines of the Ministry of Taxes.
In the registration process of legal entities, single application is used in order to apply "single window" principle effectively. All the required information is provided in this application form to register at tax authorities, State Social Protection Fund and State Statistics Committee. As a result of simplified procedures, entrepreneurs apply to the local registering bodies instead of various authorities.
According to the “Doing Business 2019” report reflecting the business environment affordability assessment by the World Bank, Azerbaijan ranks 25th among 190 countries. “Doing Business 2019” rated tax reforms implemented in the country through its “Starting a business” and “Paying Taxes” indicators. Azerbaijan has improved its ranking from 18 to 9 on “Starting a business” indicator, as well as moved up from 35th to 28th position on “Paying taxes” indicator in comparison with the results of the previous year.
|“Starting Business”||“Paying Taxes”|
Mobile ID - Asan Imza
As of September 2013, the Ministry of Taxes commenced the system of Asan Imza. Asan Imza is a service provided by the Ministry and mobile operators that ensures authentication of the user through the SIM card of the mobile phone. It is a form of secure electronic ID, which is given to the representatives of state institutions and organizations and juridical persons. Asan Imza gives an opportunity to verify one's identity and sign documents in electronic form. The company B.EST Solutions has developed the digital signature platform. The project was based on the "PPP" model (Public-Private Partnership). The process of issuing a mobile digital signature has begun from July 2013. For this purpose, the ASAN Certification Service Center (ASXM) was established in the Ministry of Taxes, which is integrated with the Automated Tax Information System (AVIS) and with the platforms of all cellular communication operators of Azerbaijan. This service is used in banks, insurance companies, online payment portals and many other institutions.
- “Vergilər” (Taxes) online newspaper - has been published since February 11, 2000. “Vergiler.az” online newspaper has been launched since January 1, 2019, replacing the printed version of “Vergilər” newspaper. The online newspaper “Vergiler.az” is an online news resource that focuses on articles, interviews and news about innovations in taxation and also enlightens economic processes.
- "Taxes magazine of Azerbaijan" (Azerbaijani: Azərbaycanın vergi jurnalı) 
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