MINISTRY OF FINANCE
OF THE REPUBLIC OF ARMENIA

On May 2, the RA government approved the package of draft laws "On Amendments and Additions to the Tax Code of the Republic of Armenia" and related laws.

The adoption of the package of projects is based on the following goals outlined by the Government's plan:

• reducing the difference in tax burdens formed within the framework of the turnover tax system and the general taxation system (VAT system) by increasing turnover tax rates,
• formation of economic incentives to substantiate the achievements of turnover tax payers with documents, strengthening the culture of documenting transactions,
• taking certain types of activities out of the micro-enterprise and sales tax preferential systems, thereby making those systems more accessible.

Regarding the increase in sales tax rates and documentation incentives, it is proposed to:

• to increase (mainly by double) the current rates of sales tax for the main types of activity,
• to expand the range of opportunities to reduce the amount of sales tax on the basis of expenses justified by documents, providing it also for the production and service sectors (currently, this opportunity is available only for the trade and public catering sectors),
• to create an opportunity so that the final (effective) turnover tax rate for taxpayers providing a high level of documentation of acquisitions is practically lower than the current rates.

Regarding the types of activities, it is proposed to establish that from January 1, 2025:

• types of legal and notary activities cannot be carried out in the turnover tax system (must be transferred to the VAT system),
• the following types of activities cannot be carried out in the micro-enterprise system (must be transferred to the turnover tax or VAT system),
• commercial (buying and selling) activities in regions,
• provision of hairdressing and body care services,
• activities of organizing saunas, baths,
• provision of car maintenance and repair services,
• mediation, including the activity of buying and selling real estate and either renting it or providing it for free use,
• software development activities,
• provision of examination services,
• execution of construction works, development of architectural design documents, implementation of real estate evaluation and measuring activities.