This post is for owners of small and medium-sized businesses with growing turnover, individual entrepreneurs and accountants. Below, based on the official text of the Tax Code, we explain in plain language the VAT rate, the VAT registration threshold, the return deadline and one important deadline related to electronic invoices.
VAT rate: 18 percent
Put simply, value added tax (VAT) is a tax added to the value of goods sold and services provided. Under Article 173.1 of the Tax Code, the VAT rate is 18 percent of the value of each taxable transaction and each taxable import.
VAT on imported goods is calculated and collected by the customs authorities in the manner established for the payment of customs duties (Tax Code, Article 177.4). In other words, import VAT is calculated and paid through the customs authorities.
VAT registration threshold: 200,000 manat
When VAT registration becomes mandatory is one of the questions business owners ask most often. Under the Tax Code, a person whose volume of taxable transactions in any month of a consecutive 12-month period exceeds 200,000 manat must submit an application for VAT registration (Articles 155.1 and 157.3.1).
- Application deadline: within 10 days from the 1st of the month following the month in which the threshold was exceeded.
- Mandatory registration date: under Article 157.3.1, the first day of the month following the month in which the threshold was exceeded.
Practical tip: track your turnover every month. Seeing in time that you are approaching the threshold helps you avoid missing the application deadline.
POS terminal turnover and the 0.5 coefficient
Article 155.1-1 of the Tax Code contains a new rule: when calculating the VAT registration threshold, in retail trade and in services provided to persons not registered with the tax authorities, turnover generated from cashless payments made via POS terminals is taken into account with a coefficient of 0.5. In other words, such turnover counts at half its amount when the threshold is calculated.
When is the VAT return filed?
Under Articles 177.2 and 178 of the Tax Code, the VAT reporting period is a calendar month. A return is filed for each reporting period no later than the 20th of the month following the reporting period. For example, the VAT return for September must be filed no later than 20 October.
Not leaving the return until the last day and checking documents at the start of the month helps avoid these costs.
E-invoice: a 5-day deadline
Paperwork is also tied to specific deadlines. Under Article 71-1.1.2 of the Tax Code, when goods that were not ordered in advance are supplied, the electronic invoice must be submitted within 5 days of the date on which the document confirming delivery of the goods is issued.
Other clauses of Article 71-1.1 set separate deadlines for other cases. That is why it is worth checking the clause that fits your situation in the official text.
Key rules in one table
| Topic | Rule | Basis (Tax Code) |
|---|---|---|
| VAT rate | 18% of the value of the taxable transaction and import | 173.1 |
| Import VAT | Calculated and collected by the customs authorities in the manner established for customs duties | 177.4 |
| Registration threshold | More than 200,000 manat in any month of a consecutive 12-month period | 155.1 |
| Registration application | Within 10 days from the 1st of the month following the month in which the threshold was exceeded | 155.1, 157.3.1 |
| Cashless POS terminal turnover (retail trade, services to persons not registered with the tax authorities) | Counted with a 0.5 coefficient when calculating the threshold | 155.1-1 |
| VAT return | Monthly, no later than the 20th of the following month | 177.2, 178 |
| E-invoice (goods not ordered in advance) | Within 5 days of the date the delivery document is issued | 71-1.1.2 |
Summary
- The VAT rate is 18 percent of the value of the taxable transaction and taxable import.
- If taxable transactions in any month of a consecutive 12-month period exceed 200,000 manat, an application for VAT registration is submitted within 10 days from the 1st of the month following the month in which the threshold was exceeded.
- In retail trade and in services to persons not registered with the tax authorities, cashless POS terminal turnover is counted with a 0.5 coefficient when calculating the threshold.
- The VAT return is filed monthly, no later than the 20th of the month following the reporting month.
- An e-invoice for goods not ordered in advance is submitted within 5 days of the date the delivery document is issued.
If you have questions about VAT registration, returns or e-invoices, message us on WhatsApp: +994 77 734 10 12. Estavor Accounting also provides tax and accounting services online — let's review your situation together based on the official rules.
📚 Sources
- Azərbaycan Respublikasının Vergi Məcəlləsi, 173.1-ci maddə
- Azərbaycan Respublikasının Vergi Məcəlləsi, 155.1 və 157.3.1-ci maddələr
- Azərbaycan Respublikasının Vergi Məcəlləsi, 155.1-1-ci maddə
- Azərbaycan Respublikasının Vergi Məcəlləsi, 177.2 və 178-ci maddələr
- Azərbaycan Respublikasının Vergi Məcəlləsi, 177.4-cü maddə (dərəcə üçün 173.1)
- Azərbaycan Respublikasının Vergi Məcəlləsi, 71-1.1.2-ci maddə
- Azərbaycan Respublikasının Vergi Məcəlləsi, 59.1-ci maddə
- Azərbaycan Respublikasının Vergi Məcəlləsi, 57.1-ci maddə
- DVX: Vergi Məcəlləsində edilmiş dəyişikliklər – suallar və cavablar (2026)
🌐 The original article is in Azerbaijani; the official sources are available in Azerbaijani.
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