If you have had any previous exposure to the Azerbaijani company law, you may perhaps be aware that a limited liability company (LLC) is a far mostly used organizational-legal form among the legal entities due to structural/management flexibility, charter capital requirements etc. However, this factor should cause much excitement and shade the fact that there are a number of statutory reporting and filing requirements that an LLC has to comply with after incorporation.
Generally speaking, an LLC has to submit reports to the Ministry of Taxes (depending on the major tax obligations, i.e., VAT or simplified tax payers), State Social Insurance Fund, the State Employment Center and the State Statistics Committee of the Republic of Azerbaijan. Baku Attorneys and Consultants as an Azerbaijani law firm compiled a table of such reporting requirements to help newly established businesses to get a general picture of the overall process. Perhaps, this list is based on certain assumptions (e.g., only VAT payers are taken into account) and may not be exhaustive. Most of the filing requirements set out below will apply for other types of commercial legal entities (OJSC, CJSC, partnerships, branch/representative office) Therefore, we urge you to consult your attorney or accountant in order to determine the exact number and types of filings to be submitted by your company.

REGULAR REPORTING REQUIREMENTS FOR LIMITED LIABILITY COMPANY IN THE REPUBLIC OF AZERBAIJAN

 

No. Mandatory Reports Deadlines for reports Consequences of non-compliance
I Reports to Ministry of Taxes
1 Annual Profit Tax Report by March 31 of each year Monetary sanction of 40 AZN (approx. USD24) as per Article 57.1 of the Tax Code;
2 Monthly VAT Report by 20th day of each month
3 Annual Property Tax Report by March 31 of each year
4 Annual Land Tax Report by May 15 of each year
5 Annual Withholding Report on payments for paid labor by January 31 of each year
6 Quarterly Withholding Tax Report by 20th day each month
II Reports to State Employment Service
1 One-time Report on job vacancies within 5 days of the date when such vacancy arises Monetary fine of 50 AZN (approx. USD30) as per Article 540 of the Administrative Offences Code;
2 Monthly Report on hiring and dismissal of staff by 10th day of each month
3 One-time report on number of people to be dismissed due to reduction of employee number or job places at least 2 months prior to such dismissal
4 Annual report on annual median list number of job places and employees by August 1 of each year
     
5 Semi-annual and annual reports on replacement of employees by 20th day of each month
III Reports to State Social Protection Fund
1 Quarterly and annual reports on paid salaries and calculated social insurance payment within 20 days upon the end of each quarter for quarterly reports

by March 1 of each year (to cover the previous year) for annual reports

Monetary sanction in the amount of 10 per cent of the calculated social insurance payments or 44 AZN (approx. USD26), if the amount of the calculated social insurance payments cannot be determined.
IV Reports to State Statistics Committee
1 Quarterly and annual reports from February 1 until March 31 of each year (to cover previous year) for annual reports Monetary fine of 300-500 AZN (approx. USD180-301) as per Article 389 of the Administrative Offences Code

OTHER MANDATORY REQUIREMENTS

  • Ordinary General Assembly of Participants

 Ordinary General Meeting of participants of the company shall be convened by the executive body at least once a year. The General Meeting devoted to the results of the company’s annual activity shall be convened within four months after completion of a fiscal year.

  • Annual Financial Report

An LLC has to issue annual financial report by April 30 each year. However, it does not need to be published or submitted to any state authority based on the assumption that the number of employees in LLC would be less than 25 and the annual profit of the LLC would be less than 200.000 AZN (approx. USD 120.000). An external auditor shall be involved for verification of the report. There is a monetary fine of 300-500 AZN (approx. USD180-301) for non-compliance with the rules regarding annual financial reports as per Article 462 of the Administrative Offences Code.

  • Mandatory Insurances

 

1 Compulsory insurance of employees for occupational and professional disability resulting from industrial accidents and occupational diseases Monetary fine of 5000 AZN (approx. USD 3500) as per Article 469 of the Administrative Offences Code
2 Insurance of immovable properties

 

Monetary fine of 200 AZN (approx. USD 120) as per Article 469 of the Administrative Offences Code
3 Third party liability insurance for the use of immovable property

 

Monetary fine of 200 AZN (approx. USD 120) as per Article 469 of the Administrative Offences Code
4 Third party liability insurance for the use of vehicles

 

Monetary fine of 300 AZN (approx. USD180) as per Article 469 of the Administrative Offences Code

Please, always feel free to contact us via www.batco.az and our attorneys will be more than delightful to speak and take you through all such statutory reporting requirements of Azerbaijani laws depending on your company’s needs.

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