On 16 December 2016 the President of the Republic of Azerbaijan
signed the law On Non-Cash Settlements (the
Below is a general summary of the Law.
Definition of Non-Cash Settlements
Non-cash settlements are defined as follows:
Settlements from one bank account to another bank account,
including using various payment instruments (payment cards, payment
instructions) and payment means (mobile telephones, computers and
Settlements using payment terminals;
Settlements by making a transfer directly in cash to a
seller's bank account.
Non-cash settlements between two taxpayers may only be made
using method 1) above, i.e.,
from one taxpayer's bank account to another taxpayer's bank
Mandatory Non-Cash Settlements
The following transactions must be made by non-cash
Payment of taxes, state duties and fees, administrative
penalties, financial sanctions and interest specified by law, debts
in respect of leasing operations and the granting of credits;
Payments made under the laws On Insurance Activity and
On Obligatory Insurance;
Service fees and other dues paid to state bodies, legal
entities owned by the state and whose controlling block of
participatory interests (shares) belongs to the state, budget
organizations and public legal entities;
Payment of salaries (including other payments made by
employers), pensions, stipends, financial aid, allowances
(including one-off allowances), compensation and contributions,
except for the same paid by persons operating in a retail trade,
catering or services business whose operations in any month
(months) of a12 month period does not exceed AZN 200,000;
Payment for stationary telephone lines and utilities
Payment and refund of interest-free monetary resources (except
for those paid by persons who are not taxpayers), other
Using (expending) resources received under state procurement
Payment of educational fees;
Payments to tourist agents;
Payments by VAT registered taxpayers and taxpayers operating in
a trade and/or catering business whose taxable operations in any
month (months) of a 12 month period exceeds AZN 200,000 in respect
of transactions exceeding in a calendar month the total amount of
Payments by taxpayers other than those mentioned in the bullet
point above in respect of transactions exceeding in a calendar
month the total amount of AZN 15,000.
Settlements with Physical Persons who are not Taxpayers
The following payments in respect of goods purchased from
physical persons who are not taxpayers may be made in
Acceptance of agricultural products from producers of
Acceptance of ferrous and non-ferrous metal scrap;
Acceptance of paper, glass and plastic materials for recycling
and other purposes;
Acceptance of used tires for the purpose of recycling.
Responsibility for the Breach of the Law
Financial sanctions for the failure to perform non-cash
settlement where a cash settlement is restricted is 10% of the
total amount of the transaction, with a subsequent increase when
repeated for a second time to 20% and for a third and greater
number of times to 40%.
More financial sanctions relate to the failure to use cash
registers in settlements with populations and other similar
The Law shall apply to VAT registered taxpayers and taxpayers
whose taxable operations in any month (months) of a 12 month period
exceeds AZN 200,000 from 1 January 2017, and with regard to other
taxpayers from 1 April 2017.
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