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A non-resident conducting electronic trade through an internet information resource refers to non-residents acting as a seller (supplier) in the provision of services and execution of works via the Internet information resource, including downloading of electronic books, music, audio and video materials, graphic images, virtual games, software, placement of advertisements, and other similar works and services.

According to the Rule, non-residents who provide works and services to residents through the internet information resource in the manner of electronic trade as mentioned above and do not operate through a permanent establishment in the Republic of Azerbaijan are to be registered electronically for the purposes of VAT.

For registration, non-residents must submit the information and documents required by the Rule into the platform for tax administration of electronic trade participants created in the Internet Tax Office of the State Tax Service. The State Tax Service checks the compliance of the information with the Rule within 20 business days, and upon confirmation of compliance, the non-resident is registered and provided with a TIN. Login and password are provided automatically to the non-resident to access the platform.

Registered non-residents must declare and pay VAT obligations in accordance with the Tax Code for the services provided and works performed.  In the meantime, persons who are considered as tax agents for VAT purposes under Article 169 of the Tax Code, do not calculate and declare reverse charged VAT on behalf of the registered non-residents for the specified transactions.

According to the rule, a tax return is submitted by the relevant non-residents if any of the following conditions are met:

• When the resident person receiving (purchasing) the works and services makes the payment through local banks located in the Republic of Azerbaijan, branches of foreign banks in the Republic of Azerbaijan, the national postal communication operator, or other payment service providers.
• When the resident person receiving (purchasing) the works and services is located in the Republic of Azerbaijan.
• When the IP address of the device used by the resident person to receive (purchase) the works and services is in the Republic of Azerbaijan.
• When the country code of the mobile operators used by the resident person to receive (purchase) the works and services or to make the payment belongs to the Republic of Azerbaijan.

In the Rule, the cases of deregistration of non-residents who are registered electronically are reflected as follows:

• When incorrect and (or) falsified information is subsequently discovered in the information and documents submitted for registration;

• When VAT declaration is not submitted and/or VAT liability is not paid within 30 business days following a notification from the tax authority regarding the submission of the VAT declaration and/or payment of VAT liability;
• When a non-resident applies for deregistration;
• When the activity of a non-resident is terminated.

According to the Rule, a deregistered non-resident is re-registered upon reapplying (provided that prior obligations are fulfilled by the non-resident after re-registration).