The State Tax Service (STS) under the Ministry of Economy continues to implement new control mechanisms related to the development of the digital economy. According to Article 99.3.8 of the Tax Code, any income other than salary that shows an increase in the value of a taxpayer’s assets is considered income from non-entrepreneurial activity if reported.
Under Article 101.2 of the Tax Code, non-entrepreneurial income is taxed at a rate of 14% per year. Individuals earning income from non-entrepreneurial activity must submit their “Income Tax Declaration” to the tax authorities and pay income tax to the state budget no later than March 31 of the following year.
Income from cryptocurrency is considered earned at the date it is reported. The taxable income is calculated based on the price increase of the cryptocurrency between the purchase date and the reporting date.
Thus, Azerbaijani tax legislation already includes a mechanism for taxing non-entrepreneurial income, including income from cryptocurrency. Individuals earning income from cryptocurrency must register with the tax authorities (obtain a TIN) and fulfill their tax obligations.
