VAT of non-residents
In accordance with requirements of the Tax Code of the Republic of Azerbaijan, purchases from non-resident companies are subject to VAT calculation and VAT reporting. If a non-resident person provides services to a customer (resident) who is a VAT payer, VAT must be calculated in the month in which the services are performed, and in the case of an advance payment to a non-resident by the customer, VAT must be calculated and paid to the state budget in the month in which the payment is made.
VAT Posting Setup for Purchases of product/services with 18% VAT from a Foreign Vendor
- VAT Business Posting Group is set as Foreign,
- VAT Product Posting Group is set as VAT18,
- VAT % is set as 18,
- VAT Calculation Type is set as Reverse Charge VAT,
- Sales VAT Account is set as appropriate Chart of Accounts account,
- Sales VAT Unrealized Account is set as appropriate Chart of Accounts account,
- Purchase VAT Account is set as appropriate Chart of Accounts account,
- Purchase VAT Unrealized Account is set as appropriate Chart of Accounts account,
- Reverse Charge VAT Unrealized Account is set as appropriate Chart of Accounts account.
VAT Posting Setup for Purchases of product/services with 0% VAT from a Foreign Vendor
- VAT Business Posting Group is set as Foreign,
- VAT Product Posting Group is set as VAT0,
- VAT % is set as 0,
- VAT Calculation Type is set as Normal VAT,
- Sales VAT Account is set as appropriate Chart of Accounts account,
- Sales VAT Unrealized Account is set as appropriate Chart of Accounts account,
- Purchase VAT Account is set as appropriate Chart of Accounts account,
- Purchase VAT Unrealized Account is set as appropriate Chart of Accounts account,
- Reverse Charge VAT Unrealized Account is set as appropriate Chart of Accounts account.
VAT Posting Setup for Purchases of product/services with exempted VAT from a Foreign Vendor
- VAT Business Posting Group is set as Foreign,
- VAT Product Posting Group is set as N/A,
- VAT % is set as 0,
- VAT Calculation Type is set as Normal VAT,
- Sales VAT Account is set as appropriate Chart of Accounts account,
- Sales VAT Unrealized Account is not set,
- Purchase VAT Account is set as appropriate Chart of Accounts account,
- Purchase VAT Unrealized Account is not set,
- Reverse Charge VAT Unrealized Account is set as appropriate Chart of Accounts account.
VAT Declaration for Non-residents
VAT Declaration for non-residents is created based on VAT entries.