ArmInfo. Tax incentives for investors may be extended in Armenia. Tax incentives for investors can be extended in Armenia. Amendments to the country's tax code were approved by the meeting of NA Standing Committee on Economic Affairs convened on December 23.
According to the co-author of the presented document, chairman of the Committee Babken Tunyan, the presented document is intended to apply the mechanism of accelerated depreciation in a pilot mode. In particular, it is stipulated that the investor can amortize fixed assets as soon as possible, up to 1 year. To do this, he/she will have the right to deduct from the income tax base all expenses for equipment and implements, production equipment and facilities. Thus, writing off the tax on profits that an investor could receive over several years, he/she will receive immediately. However, this may pose problems related to tax collection. For this reason, the period of application of the law in a pilot manner was determined from July 1 to December 31 of this year. However, the force majeure situation caused by the coronavirus and the hostilities made adjustments to this project. It is now proposed to set a deadline from 1 July 2020 to 31 December 2021. In turn, RA Deputy Minister of Finance Arman Poghosyan urged to refrain from adopting the submitted document. He recalled that according to the current legislation, business entities are required to submit data on income tax by April 20 of each year. For this reason, the Deputy Minister proposed to wait for the results of the current year, and then only decide on the further application of the law. Nevertheless, the members of the commission issued a positive opinion on the submitted document. Moreover, as expected, it will be adopted in an accelerated manner at the extraordinary sitting of the RA National Assembly, which is scheduled to take place on December 24. Earlier Babken Tunyan noted that the bill is aimed at those entrepreneurs who are planning to make investments in Armenia in the next and subsequent years. In particular, those investors who make investments before October 31, 2020 will be able to make depreciation deductions not within the established minimum terms, but to determine them at their own discretion (at least for a year). The matter is, the MP continued, that there are groups of subjects in the country for which different periods of depreciation deductions are established. So, for the field of information technology they are equal to 1 year, production equipment - 5 years, for construction projects - 20 years. The government of the country, by its decisions, establishes certain benefits for certain categories of entities, but the submitted bill is aimed at all investors. Thus, the MP noted, a temporary instrument of accelerated depreciation will be introduced, which will become an additional incentive for investors, pushing them to postpone investments for a shorter period. "I would also like to note that this instrument of accelerated depreciation in crisis situations has been used in different countries and in different periods. Today, in connection with the situation with the coronavirus, it is used by some countries," Babken Tunyan emphasized.
