On April 21, 2025, the Ministry of Economy of Azerbaijan updated the rules for onsite tax audits, originally approved on September 7, 2016. The update included amendments such as adding municipalities to the list of entities covered under clause 46-1.2.3 and revising the cashless payment requirements specified in clause 46-1.3 of rules.
Previously, VAT-registered businesses had to make cashless payments for monthly transactions over 30,000 AZN, while other taxpayers had a 15,000 AZN limit.
Now, according to clause 46-1.3, the minimum amount for mandatory cashless payments is calculated as 2% of the previous month’s turnover in goods and services. If 2% of turnover is less than 30,000 AZN, payments over 30,000 AZN must be cashless; if 2% exceeds 50,000 AZN, payments above 50,000 AZN must be cashless.
Under clause 46.1 of the onsite tax audit rules, financial transactions between taxpayers are subject to investigation. Clause 46-1.1 specifically addresses the detailed monitoring of non-cash payments made via bank accounts and payment instruments. Following the amendments in clause 46-1.2.3, municipalities have been explicitly included among the entities required to receive service fees and other payments through mandatory cashless transactions. Therefore, during onsite tax audits, taxpayers’ transactions with one another are cross-checked against the Ministry of Taxes database; any discrepancies must be clarified and corresponding taxes paid. Non-cash payments including taxes, customs fees, fines, lease debts, insurance payments, and service fees paid to government bodies, state-owned companies, budget organizations, public entities, and municipalities are processed through bank accounts and closely monitored.
This amendment promotes greater transparency in tax audits by facilitating clearer oversight of financial transactions and cashless payments.
