Friday, January 17 2025 12:17
Naira Badalian

Deputy head of NA economic committee responds to Gold Market traders 

Deputy head of NA economic committee responds to Gold Market traders 

ArmInfo. With proper documentation of expenses, the tax burden on jewelry retailers will not only not increase, but, on the contrary, will decrease. This  statement was made by the deputy head of the parliamentary standing  committee on economic issues, MP of the ruling faction of Armenia  "Civil Contract" Babken Tunyan, responding to the protests of the  workers of the "Gold Market" shopping center, who are against the  double increase in the turnover tax rate and the corresponding entry  by the former assistant to the Prime Minister Nairi Sargsyan.

The turnover tax (replaces VAT and income tax) is paid by business  entities whose annual turnover does not exceed 115 million drams  (since January 1, 2020, Armenia returned to a non-taxable annual  turnover of up to 115 million drams). Previously, they paid 5% of the  turnover of commercial activities and 3.5% of the turnover of  production. However, from January 2025, the authorities doubled the  turnover tax rates set for core activities, with the possibility of  reducing the tax payable through documented expenses.

: In his public speeches,  the Prime Minister orders legislative changes to prevent the sale of  undocumented goods. This is certainly a very correct instruction, but  its improper implementation has become catastrophic for business>,  Nairi Sargsyan wrote earlier. According to him, a gold trader buys a  used gold jewelry from a citizen at a scrap price of $ 50. He melts  it down, gets a new jewelry and sells it for $ 54. Previously, he  paid a sales tax of 5% on this sale - $ 2.7, and received a net  profit of $ 1.3. The tax was high, so they hid the turnover. 

Babken Tunyan admits that since 2025, the turnover tax rate for  representatives of the sector has doubled - from 5% to 10%. At the  same time, he notes that if expenses are documented (purchase of  gold, rent of premises, etc.), then the actual tax rate can be up to  1%, instead of the previous 1.5%.

 

The question arises: if this is so, then why do they not buy gold  legally and with documents? They say that this is unprofitable,  because the purchase entails income tax.

This is not true. According to subparagraph 39 of paragraph 1 of  Article 147 of the Tax Code, for the purposes of determining the tax  base, income from the alienation of gold and silver to a tax agent  carrying out transactions on the purchase and sale of precious  metals, products made of precious metals, metals or precious stones  through counters or points of sale at places of trade (gold markets)  is considered deductible income.

Simply put, if an economic entity in the gold market purchases gold  from individuals, then income tax is not charged on the latter.  Considering all this, there should be no complaints among business  entities operating within the legal framework and duly reporting on  their expenses and income>, - the deputy notes.

In this regard, Babken Tunyan plans to hold a discussion on this  issue in the near future, to which both Nairi Sargsyan and other  interested parties will be invited.

: So that there are no surprises or  novelties after the law comes into force>, the deputy of the ruling  faction summed up.  

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