Azerbaijan To Refund VAT On Factoring Operations
Date
1/16/2024 1:36:35 AM
(MENAFN- Trend News Agency) BAKU, Azerbaijan, January 15. Starting this
year, Azerbaijan implemented a method for refunding VAT on
factoring operations, the State Tax Service under the Ministry of
Economy of Azerbaijan told Trend .
Flexible crediting of business transactions via factoring
instruments is actively used, providing a significant boost to the
market in terms of decreasing the financial strain on businesses
and enhancing liquidity. The cost of items sold by producers and
entities engaged in wholesale trade activities is typically
recovered within 2-3 months, but in some situations later. This
results in a lack of cash for the activities of producers and
wholesale trade firms. Banks use factoring instruments to provide
financial liquidity to businesses and minimize obstacles associated
with receiving cash from buyers.
According to the Tax Code, to refund VAT, the principal cost of
purchased goods, works, and services should be sent to the seller's
bank account, and the VAT amount should be deposited in the VAT
deposit account. However, the principal value of factoring
transactions is paid to the applicable credit institution rather
than the seller. Meanwhile, restrictions on VAT refunds are imposed
as mandated by the Tax Code. Because factoring is a privilege
derived from civil law and provided to commercial entities, it has
become imperative to clearly incorporate it in tax legislation as
well. With the most recent Tax Code revisions, the possibility of
refunding VAT amounts paid when using a factoring instrument was
incorporated into the legislation to boost the attractiveness of
financial instruments and ensure good business continuity.
Stay up-to-date with more news at Trend News Agency's
WhatsApp channel
MENAFN16012024000187011040ID1107725012
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.