A late tax return or tax payment usually happens through oversight: a deadline is forgotten or documents are not collected in time. The Tax Code sets clear consequences for such cases. In this article we explain the key deadlines, late-payment interest and financial sanctions in plain language.
When is a tax return filed?
Each tax has its own reporting period and deadline. These are the deadlines entrepreneurs meet most often:
| Tax | Reporting period | Deadline |
|---|---|---|
| VAT | calendar month | by the 20th of the month following the reporting month |
| Simplified tax | quarter | by the 20th of the month after the quarter (the tax is paid by the same date) |
| Income tax on salaries (employer) | month | transferred to the budget by the 20th of the following month |
| Profit tax (resident enterprise) | year | by 31 March of the following year |
| Land tax (enterprise) | year | by 31 January of the following year |
Legal basis: Tax Code, Articles 177.2 and 178 (VAT), 221.2 and 221.3 (simplified tax), 150.3.1 (income tax), 149.1.1 and 149.2 (profit tax), 208.2 (land tax).
In addition, legal entities and individual entrepreneurs make current tax payments within 15 days after the end of each quarter (Tax Code, Article 151.1). These payments should also go into your tax calendar.
Return not filed on time: 40 manat sanction
If a tax report is not submitted within the set deadline without grounds, a financial sanction of 40 manat is applied to the taxpayer (Tax Code, Article 57.1).
This sanction is for not submitting the report on time. Not paying the tax itself on time has a separate consequence — late-payment interest. We explain it in the next section.
Tax paid late: 0.1% per day
If a tax or a current tax payment 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). In cases revealed by a tax audit, interest is charged for a maximum of 1 year (Tax Code, Article 59.2).
A simple example: if 1,000 manat of tax is paid 10 days late, the interest is 1,000 × 0.1% × 10 = 10 manat. The example only illustrates how the calculation works.
Because interest is charged for each day, the sooner the debt is paid, the less interest accrues.
Tax understated: 50% sanction
If the tax amount in a report is understated, or tax is evaded without submitting a report, a financial sanction of 50% of the understated or evaded tax amount is applied (Tax Code, Article 58.1). The law also provides a separate exception to this rule (Tax Code, Article 58.1-1).
That is why it matters to file a return not only on time but also accurately: the figures in the return should match the primary documents — invoices, contracts and payment documents.
How to avoid delays?
- Set up a tax calendar in advance: the 20th for monthly returns, 15 days after the end of the quarter for current payments.
- Collect primary documents (invoices, contracts, payroll sheets) during the month instead of leaving them to the last day.
- If an overdue debt has arisen, pay it quickly: interest is charged for each day of delay.
- Before sending a return, check the figures against the primary documents once more.
- If you pay salaries, add the deadline for transferring income tax to the calendar as well.
Summary
- The main deadline for VAT, simplified tax and income tax on salaries is the 20th of the month.
- Report late without grounds — 40 manat financial sanction (Article 57.1).
- Tax paid late — 0.1% interest for each day of delay (Article 59.1).
- Tax understated or evaded — 50% financial sanction (Article 58.1).
- Timely and accurate reporting helps avoid extra costs.
If you need help setting up a tax calendar and filing reports on time, message us on WhatsApp: +994 77 734 10 12
📚 Sources
🌐 The original article is in Azerbaijani; the official sources are available in Azerbaijani.
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