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Doing business in Armenia

Fiscal system The laws, regulations and taxation/fiscal cases of the Republic of Armenia envisaged by the law are rather sophisticated. The fiscal system is mostly borrowed from the legislation of the European countries, conceived to promote the development of market economy. Armenian fiscal/tax legislation is changed frequently, and all modifications are made publicly available through official bulletins published by the RA Ministry of Justice and sold at book shops. The profit tax rate is 20%; VAT 20%. As regards income tax, it is levied at the source. The tax year in the Republic of Armenia is a calendar year. According to the amendments to tax legislation during 2010 a clear distinction was drawn between state and local taxes. Presently, profit tax, income tax, excise tax and VAT are considered as state taxes. As regards local taxes, they include property tax, land tax, the application of which is compulsory in each community, as well as 2 new types of taxes: tax on hotels and tax on parking of vehicles. It is worth noting that the respective RA Laws on these newly introduced taxes, which have not been adopted yet, will only specify the highest and lowest rates of these taxes. The applicable rates of these local taxes will be established by the Council of each community with the suggestion of the Mayor of the community. Profit tax

Both, “residents”’ and “non-residents”, in the Republic of Armenia should pay profit tax. Residents are taxed on the © 2012 Grant Thornton CJSC. All rights reserved. 30

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