Penalties apply for late filing, failure to file or tax avoidance or evasion.
Non-maintenance of records of income and expenses in the prescribed manner attracts a penalty of 10% of undocumented expenses for the first instance. The penalty may increase to 20% of undocumented expenses for second default and 40% subsequently.
Pecuniary penalties also apply to suppliers of goods (work, services) for making cash payments exceeding the following prescribed limits:
- Up to AZN 30,000/calendar month for VAT-registered taxpayers and taxpayers engaged in trade and/or public catering services whose taxable supplies exceed AZN 200,000 in any 12-month period.
- Up to AZN 15,000/calendar month for other taxpayers.
Penalties are also applicable for supply of goods without issuing an electronic invoice or electronic tax invoice, at rates ranging between 10% and 40%.