This post is for small business owners who are not registered for VAT, individual entrepreneurs, and owners of trade and public catering outlets. Based on the official text of the Tax Code, we explain who can pay simplified tax, the rates applicable in 2026 and the return deadline.
Who can pay simplified tax?
Simplified tax is a special tax regime provided for in the Tax Code. Under Article 218.1.1 of the Code, this tax may be paid by persons who meet the following conditions:
- the person is not registered for VAT;
- the volume of the person's taxable transactions (turnover) in any month of a consecutive 12-month period is 200,000 manat or less.
The general rate under this regime is 2 percent (Tax Code, Articles 218.1.1 and 220.1).
Certain types of activity (Article 218.4) and exceptions are regulated separately. That is why, before choosing this regime, it is important to check whether a special rule applies to your type of activity.
Trade and public catering: the 8 percent rate
Under Articles 218.1.2 and 220.1-1 of the Tax Code, trade and public catering entities with turnover of more than 200,000 manat may pay simplified tax at a rate of 8 percent. All the conditions for using this option should be checked in the full text of Article 218.1.2.
6 percent on POS terminal payments: a temporary rule
Under the same article (220.1-1), a 6 percent rate applies for 3 years from 1 January 2026 to the object of taxation formed from cashless payments made via POS terminals for services provided to the public.
Simplified tax rates in one table
| Who it applies to | Rate | Basis (Tax Code) |
|---|---|---|
| Persons not registered for VAT with turnover of 200,000 manat or less in any month of a consecutive 12-month period | 2% (general rate) | 218.1.1, 220.1 |
| Trade and public catering entities with turnover of more than 200,000 manat | 8% | 218.1.2, 220.1-1 |
| Object of taxation formed from cashless POS terminal payments for services to the public | 6% (for 3 years from 1 January 2026) | 220.1-1 |
Simplified tax return: quarterly, by the 20th of the following month
Under Articles 221.2 and 221.3 of the Tax Code:
- the reporting period for simplified tax is a quarter;
- the return is filed no later than the 20th of the month following the reporting period;
- the tax is paid to the state budget by the same deadline.
For example, the return for the January–March quarter must be filed no later than 20 April, and the tax must be paid by the same deadline.
Consequences of delays
- If tax is not paid on time, interest of 0.1% of the unpaid amount is charged for each day of delay (Tax Code, Article 59.1).
- If a tax return is not submitted within the set deadline without grounds, a financial sanction of 40 manat is imposed (Article 57.1).
Practical tips for simplified tax payers
The following habits both simplify bookkeeping and help you avoid missing deadlines:
- Track your turnover every month: the regime's conditions are tied to the 200,000 manat threshold.
- Record cashless payments received via POS terminal, cash sales and other receipts separately.
- As soon as the quarter ends, prepare the information needed for the return and do not wait until the last day.
- If your type of activity changes or you open a new line of business, check in advance which rate will apply.
- Follow changes in legislation: for example, the 6 percent rate is temporary and set until the end of 2028.
Summary
- Persons who are not registered for VAT and whose turnover in any month of a consecutive 12-month period is 200,000 manat or less may pay simplified tax; the general rate is 2 percent.
- Trade and public catering entities with turnover of more than 200,000 manat may pay this tax at 8 percent.
- The 6 percent rate on cashless POS terminal payments for services to the public is temporary: for 3 years from 1 January 2026.
- The return is filed quarterly, no later than the 20th of the month following the quarter; the tax is paid by the same deadline.
- Separate rules apply to some types of activity, so check the official text before choosing the regime.
If you have questions about simplified tax, choosing a regime or the quarterly return, 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, 218.1.1 və 220.1-ci maddələr
- Azərbaycan Respublikasının Vergi Məcəlləsi, 218.1.2 və 220.1-1-ci maddələr
- Azərbaycan Respublikasının Vergi Məcəlləsi, 221.2 və 221.3-cü maddələr
- Azərbaycan Respublikasının Vergi Məcəlləsi, 59.1-ci maddə
- Azərbaycan Respublikasının Vergi Məcəlləsi, 57.1-ci maddə
🌐 The original article is in Azerbaijani; the official sources are available in Azerbaijani.
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