Import of cars from EEU countries by individuals to be exempted from VAT

 

"The Government of Armenia held intensive talks with the EEU partners to remove the imperfections in the VAT mechanism that hamper trade," the prime minister said. He said they planned to exempt the import of passenger cars from the EEU from VAT in 2017, but the issue was settled after discussion with the president.

 

Minister of Economic Integration and Reforms, Deputy Prime Minister of Armenia Vache Gabrielyan, in turn, suggested relevant amendments to the Law on VAT and requested two days for final elaboration of the amendments.  

 

On February 8, EEC Minister Tatyana Valovaya said that levying 20% VAT from the individuals importing cars to Armenia from the EEU member states runs counter to the legal and contractual framework of the organization. "There are no de jure non-tariff barriers within the EEU. We had such a barrier in Kazakhstan, but it was removed. Now we experience a similar barrier in Armenia," the minister said. 

 

In response to that statement, Armenian Deputy Finance Minister Armen Alaverdyan said: "We will keep levying VAT from the cars being imported to Armenia from the Eurasian Economic Union (EEU) member states, thereby exercising our right." Alaverdyan said on the Public Television of Armenia that the right to levy VAT from the cars is fixed in the transitional provisions of the EEU and, consequently, Yerevan has not violated the EEU regulations. 

 

Some analysts blame the economic leadership of Armenia for their unwillingness to lift the VAT, as it will insignificantly affect the budget revenues and the businesses of some oligarchs - owners of car saloons. It is noteworthy that new cars in Russia are 1.5-2 times cheaper than in Armenia.