ArmInfo. In March 2018, the Armenian government, in the person of the Ministry of Finance, initiates further amendments to the Tax Code of the country. The amendments, Deputy Finance Minister David Ananyan explained to ArmInfo correspondent, mainly concern the revision of the approaches to calculating tax liabilities in the framework of the joint activity agreement, determining the cost of acquisitions within concession agreements, as well as a number of articles in the bankruptcy procedure.
In particular, according to Ananyan, the current taxation procedures under the joint activity agreement are "not very good". It is for this reason, as Ananyan pointed out, referring to the statistics, during the last 5 years such a treaty is not concluded. According to the Finance Ministry, the tax legislation, both old and new, did not provide reasonable regulation for the participants in the process. For today, the ministry specifies taxation systems for the participants of the process. So, the current legislation provides for the implementation of all tax liabilities formed on the basis of joint activities of one of the parties to the contract, and only then provides for the redistribution of profits. The Ministry of Finance insists on the implementation of tax obligations by each of the parties to the contract and the redistribution of all revenues.
In terms of determining the value of acquisitions under concession agreements, the Ministry of Finance proposes a review of the procedure for calculating VAT. In the event that the exploiter of concession assets creates a new asset and transfers it to the state, then this transaction is exempt from VAT. At the same time, acquisitions within the framework of a transaction are eligible for tax assessment. Suppose, if the concessionaire builds a new water channel that will continue to be exploited, according to the procedure, purely formally, it must be returned to the state, since all infrastructure remains state property, and only then it gets the right to use. At this stage, the Ministry of Finance proposes to release the transfer of a new water channel to the state from VAT. At the same time, the financial department grants the exploiter the right to calculate VAT from payments to the builder or pipe supplier.
The next rule concerns reforms in bankruptcy procedures. Often, according to the Ministry of Finance, it is the excessive tax burden in the process of financial recovery that puts an end to the sanitation of the enterprise. The ministry is going to reconsider the legislative regulation of the sphere in order to understand what obligations business is burdened with in the process of bankruptcy. In general, the agency plans to find flexible mechanisms for the recovery of companies in bankruptcy, at the same time, excluding cases of artificial bankruptcies. For this, changes will be made in legal acts regulating the procedures of the insolvency institution outside the framework of the Tax Code. In addition, issues related to the payment and calculation of VAT on alienation of the subject of pledge will be reviewed.
Earlier, ArmInfo informed that on the basis of impulses coming from the public in September-October 2017, the Armenian government initiated the process of revising the Tax Code adopted earlier a year earlier in order to polish the tax legislation. As part of the initiative, 242 legal acts and about 113 articles were revised for three main groups: in 33 of them there are changes in the content of the rule of law, 80 changes in terminology, as well as other changes - technical and concretizing. The main ones were changes in the taxation of dividends, overpayments accumulated under the minimum income tax, the taxation of the public catering sector, revised tax incentives for the purchase of housing on mortgages. The government also freed the sphere of inbound tourism from VAT in the next 3 years and changed the order of taxation of diesel fuel.
The Tax Code of Armenia was criticized by the country's expert and entrepreneurial community, since, in their view, the document is conceptually directed not at development, but at satisfying the state's fiscal tasks.