OMM Redaksiyası
What is a taxpayer identification number, who must obtain one, how can it be opened online and how much does the process cost? These questions are particularly relevant for individual entrepreneurs, freelancers, taxi drivers and people earning income through digital platforms.
Previously, applicants had to contact the relevant authorities to register for tax purposes. Today, a number of tax services can be accessed electronically.
So, what is a taxpayer identification number and how can it be obtained? Is it possible to open one online? What documents are required and how much does the service cost?
This guide brings together answers to the most frequently asked questions for people seeking to obtain a taxpayer identification number.
What is a taxpayer identification number?
A taxpayer identification number is the identification number assigned to a taxpayer.
The number is used to maintain a taxpayer’s records and identify them when they use tax services.
Individuals who wish to engage in entrepreneurial activity must register for tax purposes in accordance with legal requirements.
A taxpayer identification number is used by both individuals and legal entities. Individual entrepreneurs, limited liability companies and other legal entities hold such numbers as taxpayers.
How is a taxpayer identification number obtained?
Electronic options for obtaining a taxpayer identification number have expanded. Individuals can use online services to register for tax purposes.
To do this, they can access the tax portal using digital identification tools such as SİMA İmza.
Alternatively, applicants may contact the relevant tax authority or an appropriate service center in person.
What documents are required?
When registering for tax purposes in the traditional manner, the required documents may vary depending on the applicant’s status and the method of application.
Generally, applicants submit:
- an identity document;
- a relevant power of attorney if the application is submitted by a representative;
- other documents required by law.
When applying electronically, the process is completed through digital identification.
Is it possible to obtain one online?
Yes. Registration for tax purposes can be completed electronically.
The State Tax Service’s electronic services portal is used for this purpose.
Electronic portal of the State Tax Service
The integration of SİMA İmza with the tax portal allows users to access a number of tax services remotely.
As a result, individuals do not have to visit a service center in every case to register for tax purposes.
How to obtain one online using SİMA İmza
The general process is as follows:
1. Open the State Tax Service’s electronic portal.
2. Select SİMA İmza as the electronic identification method.
3. Select the service for registering an individual for tax purposes.
4. Enter the required information into the system.
5. Confirm the application electronically.
Once registration is completed, the taxpayer is issued the relevant identification number.
How much does it cost?
The cost of obtaining a taxpayer identification number may vary depending on the service used and the digital signature tool.
The online tax registration process itself can be completed free of charge.
However, separate costs may arise for a digital signature certificate, a bank account, accounting and other services used by the entrepreneur.
Therefore, it is important to distinguish between the “cost of obtaining a taxpayer identification number” and the “overall costs of conducting business.”
Who must obtain one?
A taxpayer identification number is mainly important for people engaged in entrepreneurial activity.
This may include individuals working in various fields, such as:
- individual entrepreneurs;
- freelancers;
- taxi drivers;
- service providers;
- people earning income from property;
- people earning income from creative or copyright-related activities;
- other individuals engaged in entrepreneurial activity.
Legal entities also hold taxpayer identification numbers.
Do taxi drivers need one?
The tax registration of people engaged in taxi services is particularly important.
If a person earns income by providing taxi services, their activity must be formalized from a legal and tax perspective.
In particular, people providing taxi services through Bolt, Uber and other platforms must take their tax obligations into account.
The Tax Code also provides special simplified tax rules for taxi activity.
More detailed information is available in our previous guide:
What is simplified tax? Who pays it, what is the rate and what does the 200,000-manat threshold mean?
Do freelancers need one?
Freelancers must also pay attention to tax matters.
For example, if programmers, designers, copywriters, translators and other specialists independently provide services and earn income, the issue of formalizing their activities for tax purposes arises.
Having a taxpayer identification number allows freelancers to operate officially, conclude relevant contracts and fulfill their tax obligations.
This is particularly important for people working with foreign companies and international platforms.
Does a freelancer earning income from abroad need one?
Working with foreign clients does not automatically remove a freelancer’s tax obligations.
If a person receives payment from a foreign company for programming, design, translation or other services, the income must be considered for formalization in accordance with Azerbaijani legislation.
For this reason, people working on foreign platforms should pay attention not only to platform requirements, but also to Azerbaijan’s tax legislation.
What can be done after obtaining one?
After obtaining a taxpayer identification number, a number of additional procedures may be completed depending on the nature of the business activity.
These may include:
- opening a bank account for business activities;
- issuing electronic invoices;
- submitting tax returns electronically;
- making tax payments;
- using electronic services related to POS terminal registration;
- obtaining information about tax registration and obligations.
The important point is that obtaining a taxpayer identification number does not automatically resolve all of an entrepreneur’s tax obligations. Depending on the type of activity, tax, social insurance and other obligations may arise.
Do influencers need one?
People earning income through social media and digital platforms may also have tax obligations.
The formalization of activities is especially relevant for influencers receiving payments for advertising, commercial partnerships, or promoting products and services.
Accordingly, influencers should consider registration for tax purposes and other tax obligations depending on the nature of their income and the form of their activities.
How to use SİMA İmza to obtain one
To use electronic services with SİMA İmza, applicants must first have an appropriate digital signature certificate.
Detailed information about the options offered by SİMA to individual entrepreneurs is available on its official website.
SİMA İmza – options for individual entrepreneurs
The website provides current information on obtaining digital signature certificates, campaigns and other terms.
What does it offer an entrepreneur?
One of the main advantages is the official formalization of entrepreneurial activity.
Depending on the nature of the activity, this may allow an entrepreneur to:
- conclude official contracts;
- use a bank account;
- formalize income;
- submit tax returns;
- send electronic invoices;
- build an official financial history for business activities.
In this respect, it is not merely a tax number but also a key element in formalizing entrepreneurial activity.
What should be known before obtaining one?
Before obtaining a taxpayer identification number, an entrepreneur should determine how the business will be conducted.
Obtaining the number does not complete the process. Depending on the type of activity, the entrepreneur may need to choose a tax regime, submit returns and fulfill social insurance and other obligations.
For example, the tax obligations of a taxi driver, freelancer, shop owner and influencer may differ.
Therefore, it is important to determine the tax regime applicable to the activity before obtaining a taxpayer identification number.
Quick guide: If you want to obtain one
Main steps:
1. Determine your activity.
2. Choose the method of tax registration.
3. If you wish to apply online, use a digital signature.
4. Open the State Tax Service’s electronic portal.
5. Submit the required information.
6. After obtaining the number, determine the tax and other obligations applicable to your activity.
Conclusion
Today, people seeking to start a business can register for tax purposes more easily and digitally than in previous years.
It is particularly important for individual entrepreneurs, freelancers, taxi drivers and people earning income through digital platforms to clarify tax registration requirements in advance.
Most importantly, before obtaining a taxpayer identification number, applicants should focus not only on receiving the number, but also on which tax regime applies to their activity and what obligations arise.
Note: As tax legislation may change, applicants are advised to rely on the latest information from the State Tax Service when determining tax obligations for a specific activity.
