ArmInfo. In Armenia, state-cofinanced programs will not be subject to profit tax, but will be assessed as assets in constructed buildings and infrastructure. The National Assembly of the Republic of Armenia adopted amendments to the Tax Code in the first reading at its plenary session on January 20.
According to Deputy Minister of Finance of the Republic of Armenia Arman Poghosyan, currently, under various programs implemented in many sectors of the economy, funds provided by the state for assistance programs are subject to profit tax from the year the financial resources are received. However, there are often cases where program beneficiaries make investments and then request co-financing from the government for certain projects, even though these investments were made three years earlier.
Consequently, support funds may result in tax liabilities for beneficiaries, and, as a result, a negative balance for them. In this regard, according to the legislative initiative, state-cofinanced programs will not be subject to profit tax from the year the financial resources are received, but will be assessed as assets in constructed buildings and infrastructure. This problem is particularly acute in the agricultural sector, which is exempt from profit tax until the end of this year. However, due to related incidents in the sector, tax liabilities arise. According to the amendments, if related incidents exceed the sale of agricultural products by 10 percent or more, this type of activity is subject to profit tax.
The bill will be retroactive and will apply to relations effective January 1, 2024.
