Today, on May 20, the Armenian Government urgently approved the draft Law 'On Making Amendments and Additions to the Tax Code' during its meeting.
Presenting the project at the government session, Acting Minister of Finance of the RA Atom Janjughazyan mentioned that the proposed changes aim to address the issues that arose among developers in the real estate market. These issues surfaced after the modifications made last year, particularly related to property tax.
Atom Janjughazyan highlighted that the issues revolve around the pricing of real estate transactions and the recognition of the transaction moment.
In the case of the transaction price, the value, which is approximated to the cadastral market value for real estate taxation purposes, already includes the value-added tax. Consequently, in terms of forming the profit tax base for the value-added tax, it results in the calculation of this amount twice. The proposed regulatory change aims to address this by applying 80 percent of the cadastral approximate value for the purpose of calculating the tax base," said the acting minister.
The other proposed amendment suggests recognizing the moment of the real estate transaction as the day of registration of the right to purchase.
Atom Janjughazyan emphasized that the proposed change will create certainty in the real estate market, as a result of which developers will be able to better plan their flows.