Threshold for bad accounts receivable to be raised in Armenia 

ArmInfo.. In Armenia, the threshold for accounts receivable of organizations considered  hopeless will be raised from 100 thousand drams to 300 thousand drams. 

At the meeting on November 6, the Committee on Economic Affairs of  the National Assembly of the Republic of Armenia issued a positive  opinion on the amendments to the Tax Code of the Republic of Armenia  submitted by the Government of the Republic of Armenia. As the  Minister of Economy of the Republic of Armenia Gevork Papoyan noted  in his speech, organizations often make mistakes when accounting for  accounts receivable in income tax accounting. 

According to the current regulation, to determine the taxable base of  the taxpayer, deductions for writing off bad debts are deducted from  the gross income. Accounts receivable, the total amount of which  exceeds 100 thousand drams, are considered hopeless from the date of  entry into force of the court decision on satisfying or refusing to  satisfy the claim for confiscation of the amount of accounts  receivable.

The Minister reported that according to official statistics, in 2022,  the courts of general jurisdiction of Armenia accepted 172,476 civil  cases for proceedings, of which 159,683 or 93% of all cases accepted  concerned the confiscation of funds. Large business entities often  have the resources to reduce legal costs, but the problem of accounts  receivable reduces this opportunity. 

As a result of negotiations with audit companies, it becomes clear  that, along with the income tax, large companies have problems with  paying off bad debts. Small companies, on the contrary, do not have  the resources to pay legal costs, which leads to an increase in cases  related to the administration of cases related to bad debts. In this  regard, a provision is being introduced into the Tax Code to increase  the threshold of accounts receivable. The Minister noted that the  current law entered into force on December 31, 2002 and has been in  force for about 22 years. During the specified period, inflation was  113.74%, and thus, 100 thousand drams today already amount to 224  thousand drams.