Mechanisms for providing financial support to entrepreneurs affected by the coronavirus pandemic announced

June 16, 2020
News

In order to ensure implementation of paragraph of Order of President of the Republic of Azerbaijan No. 1950 dated March 19, 2020 “On a number of measures to reduce the negative impact of the coronavirus (COVID-19) pandemic and, consequently, sharp fluctuations in world energy and stock markets on the economy of the Republic of Azerbaijan, macroeconomic stability, employment and entrepreneurship”, the Cabinet of Ministers approved the Action Plan on April 4, 2020. The implementation of the measures entrusted to the Ministry of Economy in the Action Plan is divided into 3 stages. At the initial stage, it is planned to pay a certain part of the salaries of employees working in the areas affected by the pandemic, provide financial support to individual (micro) entrepreneurs, as well as provide tax incentives to protect economic activity.

The Ministry of Economy informs the following taxpayers about the payment of a certain part of the salaries of employees working in the areas affected by the pandemic at the initial stage and the provision of financial support to individual (micro) entrepreneurs:

In order to prevent the reduction of the number of jobs in the areas affected by the pandemic, within the mechanism of payment of a certain part of the wages of employees working on the basis of an employment contract:

This measure envisages the provision of financial support by the state in the amount of 215 million manat to entrepreneurs to pay a certain part of the salaries of 300,000 employees (with employment contracts) working in the areas and clusters affected by the pandemic. Under this mechanism, a certain part of the salaries to be paid to their employees and the corresponding social insurance premiums will be transferred to the bank accounts of employers in a short period of time, based on the applications submitted by taxpayers through the electronic offices available in the Internet Tax Office (www.e-taxes.gov.az).

Payment will be made as follows:

All registered taxpayers will be notified about “The Pandemic Financial Support Program” in their personal electronic cabinet or SMS upon this will be sent to their mobile phone. Taxpayers must enter the “Salary Payments Application” sub-section through the “Pandemic Financial Support Program” section in the personal cabinet of the Internet Tax Office and fill in the online application form in the relevant sub-section.

The registry information ( name of the tax authority where the taxpayer is registered;

TIN; active bank accounts; number of employees under employment contracts as of March 1, 2020 and the date of application) is automatically reflected in the online application form.

Taxpayers must fill in the online application form for additional information on the areas affected by the pandemic, economic entities (facilities), the number of employees in the affected area and the salary fund. This information is automatically checked with the accounting database.

If the system does not detect discrepancies, the information is automatically received and a notification is sent to the taxpayer.

Note: Discrepancies may be detected by the system during the verification of the application. These are the cases when the taxpayer’s field of activity and economic entity (entity) do not correspond to the area affected by the pandemic, there are reductions in the number of employees at the date of application, transactions with risky taxpayers. If the discrepancy in the registry information is eliminated, the taxpayer will be able to re-apply online through his personal account.

Payments to taxpayers will be made in two (2) stages, including April and May.

Special note: financial support funds allocated from the Bank may be transferred only on salary purposes. Taxpayers cannot use these funds for any other purposes and this issue will be closely monitored. The average monthly salary in the country (AZN 712) will be taken as the main criteria for the payment of a certain part of the salary of employees. If part of the employees of the enterprise receives a salary higher than the average monthly salary, then their compensation will be calculated as long as it does not exceed the average monthly salary.

Information on taxpayers to whom the funds are allocated will be announced to the public through the Internet resources of the Ministry of Economy and its agencies, and the media.

Financial Support to Individual (Micro) Entrepreneurs

Under this mechanism, the state will provide financial support in the amount of 80 million manat to 300,000 individual entrepreneurs engaged in entrepreneurial activities in areas affected by the pandemic. This financial assistance will apply to taxpayers who have paid taxes, compulsory state social insurance premiums and unemployment insurance premiums in 2019.

To ensure financial support as soon as possible, individual entrepreneurs shall submit an application through the electronic cabinet available in the Internet Tax Office (www.e-taxes.gov.az), and the funds allocated from the state budget are transferred to the bank accounts of those individual entrepreneurs.

Payment will be made as follows:

All registered taxpayers will be notified about the “Pandemic Financial Support Program” in their personal e-accounts and SMS to their mobile phones. Taxpayers must enter the sub-section “Application for payments to individual entrepreneurs” from the section “Pandemic financial support program” in the personal account of the Internet tax office and fill in the application form electronically in the relevant sub-section here.

Registry information (taxpayer’s name, TIN, areas of activity, bank accounts, taxes paid in 2019) will be automatically reflected in the application form.

Taxpayers must fill in the application information online about their tax regime (being a 2 percent simplified taxpayer, operating with a fixed receipt, engaged in transportation activities, or being a payer of income tax (micro)) online. This information is automatically checked by the accounting database.

If the system does not detect discrepancies, the information is automatically received and a notification is sent to the taxpayer.

Note: Discrepancies may be detected by the system during the verification of the application. This may be due to non-compliance of the tax regime chosen by the taxpayer with the existing tax regime in the database, suspension of the taxpayer’s activities before March, failure to make tax payments to the budget in 2019, transactions with risky taxpayers. In these cases, the taxpayer will be given the opportunity to eliminate the identified discrepancies and re-apply.

If there is an order in the bank accounts of a taxpayer who is an individual entrepreneur in connection with his debt to the state budget or extra-budgetary state funds, it will be ensured that the transferred funds are not frozen or written off.

If the amount of payment of an individual (micro) entrepreneur to the state budget in 2019 is less than 250.0 manat, he will be provided with financial support in the amount of 250.0 manat.