Programs co-funded by government not to be taxable in Armenia 

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.