Armenian Finance Ministry makes specifics in taxation of dividends to private persons

ArmInfo.  Dividends in respectto resident persons will be charged from 2018," Armenian Finance Minister Vardan  Aramyan said at a government meeting on November 23. On the proposal  of the Ministry of Finance, the Cabinet of Ministers of Armenia  approved the introduction of amendments and additions to the Tax Code  of the country, which will enter into force on January 1, 2018.   "About 90% of the proposed changes, the country's financial  department has developed on the basis of proposals received from the  private sector," said RA Minister of Finance Vardan Aramyan.

As Vardan Aramyan stated, on the whole, the 131st legal norm was  amended, 17 of which touched upon the essence of the legal norm. The  first amendment affected the taxation of dividends. For today, the  legal norm states that unless a decision is made on the  redistribution of profits by the company's general shareholders  meeting on June 30 following the reporting year, the tax year, the  state, nevertheless, withdraws its part in the form of tax. "On the  one hand, the norm was established in order to close the channels by  which companies operating on the basis of foreign capital could  withdraw their economy from the economy without taxation, on the  other hand, this contradicts the principle of corporate governance,  on the basis of which decisions were taken abandon this approach,  providing an opportunity for the managing body of the economic entity  - the Board of Shareholders to make this decision, "Aramyan said.

The Finance Ministry also revised the taxation of dividends on  individuals. Vardan Aramyan recalled that in 2018 the norm comes into  force providing for the taxation of dividends for individuals of  non-residents and residents in the amount of 10% and 5% respectively.  However, it was not specified which period should cover this legal  regulation - from 2000 to 2018, or after the entry of the legislative  norm into legal force. "If we promised them a zero rate before 2018  and they saved up the profit that should be distributed later, it is  clear that these savings should not be taxed, and after the new rules  of the game are in force, starting from 2018, I will be charged on dividends, while non-resident persons dividends taxation is to be started from  2017" said Vardan Aramyan.