Indirect tax ebook - Armenia

Registration

The VAT taxable persons are companies and individuals carrying out economic activity and performing VAT taxable transactions in the Republic of Armenia. Economic activity means any activity for which a payment is received.

The local or foreign companies with a permanent establishment in Armenia are deemed to be a VAT payer either by the virtue of the law or upon its application-request, unless the requirements set forth by the RA Law 'On Value Added Tax' (hereinafter referred to as 'the Law') are met.

Particularly, the companies become VAT payable when their taxable turnover for the past calendar year exceeds the threshold of 58.35 million Armenian Dram (AMD). There are some peculiarities for becoming VAT payable irrespective of this threshold when:

• the company or individual imports or manufactures excise tax taxable goods
• the company or individual activity is subject to licensing and the annual license duty exceeds or equal to 100 thousand AMD
• the 20% or more of share or charter capital of the company belongs to the other company or entrepreneur, or individual having 20% or more participation in share or charter capital of another company
• 80% or more of purchases or sales are treated with the same buyer or supplier
• the counterparts are related parties according to the local legislation.

If the company or individual wishes to become VAT taxable even failing to meet the above requirements, the set company or individual can apply to the tax authorities. The former becomes VAT payable starting from the following tax period when an application is submitted.

VAT taxable transactions mean:

• transfer of ownership right to goods, production, real estate (buildings, constructions, land) to other persons (including the transfer of ownership right to properties being objects entrepreneurial activity by non-entrepreneur individuals)
• provision of services (lease of goods and real estate is also considered as rendering of services)
• granted or partially granted supply of goods or provision of services
• import of goods under 'import for free circulation' customs regime.

According to the local customs regulation, non-entrepreneur individuals are subject to pay VAT for importing goods to the territory or country when the quantity or the amount of imported goods exceeds limits fixed by legislation.

The individuals or companies receiving goods or services from foreign companies without a permanent establishment in Armenia bear the VAT burden and pay it on behalf of the foreign companies. Notwithstanding the above, these individuals or companies can issue invoices on behalf of foreign companies.

Information about Armenia

• Introduction
• Scope
• Registration
• Tax rates
• Reporting & filing
• General tax application/Time of supply
• Other local requirements