ArmInfo.Areas of activity that are characterized by a high degree of profitability may be deprived of the right to be considered micro-entrepreneurship entities and, accordingly, enjoy a preferential tax regime, Armenia's Deputy Minister of Finance Arman Poghosyan told a press conference as he commented on expected changes in taxation of microbusinesses.
He recalled that the draft law, which introduced changes to the taxation of micro-entrepreneurship in three areas, was adopted by the Armenian Parliament on November 24, 2022. One of them concerned the taxation of the income of persons employed in this area, and there are approximately 35,000 of them.
In particular, if previously employees engaged in micro-entrepreneurship (with an annual turnover of up to 24 million drams) were exempted from all types of taxes, except for income tax in the amount of 5 thousand drams per month, which was calculated and paid from their wages and income equivalent to it , regardless of the amount of wages and incomes equated to it, then after the changes were made from July 1, 2023, they were transferred to the general field, that is, to a 20% income tax.
Responding to the concern of micro-businesses about the increase in the tax burden for them and the increase in expenses, the Deputy Minister recalls that this is not about the tax obligations of the micro- entrepreneur as a business unit, but about the obligations of their employees. At the same time, the representative of the department that determines the tax policy of the country admits that despite the fact that taxes are paid "from the pocket" of the employee, the tax agent is the employer, who pays the employee the salary already in its pure form - after deducting all types of taxes. And this means that one way or another, the employer and the employee will have to agree on the issue of determining the amount of wages.
Nevertheless, according to Poghosyan, the establishment of a single income rate for individuals is also justified from the point of view of the principles of fair taxation, given that we are talking about the same type of income.
According to the Ministry of Finance, at the end of 2022, there are about 53,000 micro-entrepreneurship entities operating in Armenia. About 36% are engaged in trade, 21% - in the provision of services, 16% - in the processing industry. Another 3 thousand last year switched to another taxation system (VAT, turnover tax) due to exceeding the bar of 24 million drams, or revealing affiliation with other taxpayers.
Recall that from January 1, 2023, the conditions for microbusiness have been tightened in the Republic of Armenia. In particular, from January 1, 2023, organizations and individual entrepreneurs receiving rent, interest or royalties, that is, being parties to an agreement receiving rent, interest or royalties, cannot be microentrepreneurs. From January 1, 2023, the ability of income tax payers to reduce the tax base on the basis of settlement documents issued by micro-enterprises was limited.
