Penalties for Absence of Accounting Division

According to the Law on amending the Code of Administrative Offenses dated 14 June 2019, enterprises may be penalized for the absence of an accounting division or not hiring external accountants. 

The Law imposes administrative liability on accounting subjects (i.e. enterprises) for not creating relevant structural division on accounting or, as an alternative, not contracting external accounting service providers. 

According to the Law on Accounting “legal entities in the territory of the Republic of Azerbaijan, regardless of their ownership or structural form, as well as natural persons conducting entrepreneurial activities without creating legal entity, are accounting subjects.” Nevertheless, this requirement of the Law does not apply to directors of micro and small enterprises, as well as, to sole entrepreneurs. The directors of micro and small enterprises and sole entrepreneurs are entitled to carry out their accounting themselves without establishing a division or hiring external accountants. 

For failure to comply with this requirement, officers of the respective enterprise may be penalized with an administrative fine in the amount between 300 and 400 manats. 

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