In Azerbaijan, every citizen earning income is legally required to pay taxes—a cornerstone of the country’s economic system. Yet certain sectors, especially creative professions like singers and musicians, pose a significant challenge for tax authorities, particularly those performing at weddings and other private celebrations.
The country’s wedding industry is a multi-million-manat business, with performance fees for top artists often reaching thousands of manats per hour. These payments are typically made in cash or tips, making income tracking difficult and leaving room for widespread tax evasion.
Economist Khalid Kerimli recently shed light on the legal tax obligations facing performers.
“According to tax law, individuals who earn income through performances are required to register with the tax authorities, obtain a taxpayer identification number (VÖEN), and pay taxes just like any other business entity,” Kerimli explained.
Artists have several ways to legally declare their income, he noted:
Registering as individual entrepreneurs, which obligates them to pay 20% income tax;
Setting up micro-enterprises or LLCs, particularly beneficial for those working with producers, which may offer more favorable tax regimes.
Kerimli emphasized that from a legal standpoint, the work of event performers is no different from that of large companies:
“All income-generating activity is subject to taxation. Failing to comply carries serious penalties.”
If tax evasion is detected, performers may face:
A fine of 50% of the unpaid tax amount;
A daily penalty of 10% on the overdue balance;
In serious cases, criminal prosecution.
The commentary reflects growing government interest in bringing transparency to the entertainment sector, where unreported cash income remains a widespread issue. As enforcement tightens, performers may soon face increased pressure to formalize their business activities or risk legal consequences.
