In Azerbaijan, singers earn 15,000 but pay only 20 manats in taxes?

One of the topics that never ceases to be discussed in Azerbaijan is the income of singers and musicians. The luxurious homes, expensive cars, and clothing of artists attract people's attention and raise numerous questions about how much they earn. This topic is particularly actively discussed after information emerges that some singers perform at weddings for 5-15 thousand manats and even higher amounts.

In addition, singers earn income from music video shoots, advertising, and other types of activities.

But what criteria are used to determine the actual earnings of artists? How is the compliance of declared income with actual income verified? What mechanisms do tax authorities use in this process?

As reported by BAKU.WS, in response to an inquiry from Bizim.Media, the State Tax Service stated that a taxpayer is obligated to keep records of income, expenses, and objects of taxation, to provide tax reports in cases stipulated by law, and to pay assessed taxes in a timely manner.

The information emphasizes that fulfilling these obligations is one of the main conditions for ensuring the transparency of the tax system and the correct determination of tax liabilities.

"According to the Tax Code, individuals engaged in individual activities without hiring employees and earning income from hosting weddings, celebrations, and other events, as well as from playing musical instruments, dancing, performing ashug songs, comic performances, and similar activities, fulfill their tax obligations by obtaining a receipt for the payment of a fixed amount of simplified tax, mandatory state social insurance contribution, and mandatory health insurance contribution.

These individuals must register for tax purposes, obtain a taxpayer identification number (VÖEN), and before commencing their activities, voluntarily obtain the aforementioned receipt from the State Tax Service for the following month, quarter, half-year, or year.

The monthly fixed amount of simplified tax for individuals engaged in the specified types of activities is 20 manats.

For individuals carrying out such activities, the monthly tax amount is determined using the following coefficients:

- Baku, including villages and settlements — coefficient 2;

- Ganja, Sumgayit, and Khirdalan — coefficient 1.5;

- settlements and villages of the Absheron district (excluding the city of Khirdalan), as well as the cities of Shirvan, Mingachevir, Nakhchivan, Lankaran, Yevlakh, Sheki, and Naftalan — coefficient 1;

- other districts, cities, settlements, and villages — coefficient 0.5."

It is noted that to ensure the correct calculation of taxes and their full and timely payment, tax authorities carry out various measures.

"In particular, tax authorities analyze declarations and reports submitted by taxpayers. In addition, the proper fulfillment of tax obligations can be monitored based on the taxpayer's registration data, reports submitted by them, other information available to the tax authority, as well as information obtained in the manner established by legislation.

Analysis of such data makes it possible to assess whether the income, expenses, and other objects of taxation declared by the taxpayer correspond to their actual activities.

If discrepancies between the data are identified or circumstances indicating incorrect calculation of tax liabilities are found, control and inspection mechanisms provided for by legislation may be applied," the statement says.