(ARMENIA) THE LAW  ON INCOME TAX
 
 
(ARMENIA) THE LAW ON INCOME TAX

Chapter 4. Deductions From the Gross Income 


Article 8. Deductions from Gross Income
1. When determining taxable income deductions provided by this law (deductible income, personal deductions and expenses) may be subtracted from gross income. 


Article 9. Deductible Income
c) property and cash received from individuals as inheritance or gifts in accordance with the legislation of the Republic of Armenia;
d) amounts of monetary and in-kind assistance provided to individuals within the confines of charter activities of non-commercial organizations registered pursuant to the procedures established by the legislation of the Republic of Armenia and registered with the tax agency;
g) gratis amounts considered grants under procedures established by the law


Article 13. Charity and Other Donations
When determining taxable income, gross income shall be reduced by the amount of the total cost of assets (goods and/or funds) transferred (provided) or services rendered to the organizations listed below, although not to exceed 5 percent of the taxable income calculated pursuant to this law, namely:
a) public and religious organizations, political parties of the Republic of Armenia;

 

PROFIT TAX


Article 8. Elements not Treated as Income
Within the context of this law, donated assets (including member fees) and gratis services rendered to non-commercial organizations, shall not be considered as income. 


Article 23. Charity Transfers and Other Donations
When determining taxable profit, gross income shall be reduced:
a) in the amount of assets (goods and/or cash) transferred (provided) to the non-commercial organizations, libraries, museums, public schools, asylums, residential homes and orphanages as well as to the psycho-neurological and tuberculosis treatment infirmaries and hospitals, also in the value of services rendered thereto, but not to exceed 0,25 percent of gross income;
b) Invalid
3. Profit tax settlement forms shall not be completed (and filed) by:
b) non-commercial organizations, provided that the gained means are not considered as incomes exclusively by article 8 of this law. 


Article 24. Donations
In terms of this law, assets (except for financial resources and land) gained gratuitously are considered as incomes within the reporting period when they are considered to be expenses or losses, irrespective of the fact of deduction of the mentioned expenses or losses from gross income.

 

VALUE ADDED TAX


Value added tax (VAT) is an indirect tax which in compliance with this law shall be paid (levied) to the State budget for imported goods at all stages of their production and turnover, as well as for the rendering services on the territory of the Republic of Armenia (RA). 


Article 2.
Individuals and organizations carrying out independent economic (business) activity in accordance with the procedure defined by the law and implementing transactions (operations) listed in article 6 of this law shall be considered VAT payers.
Economic activity implemented regularly for the purpose of deriving income (profit) shall be considered business activity. Any activity performed for compensation in any form shall be considered an economic activity.

Article 7.The following shall not be subject to VAT taxation (shall not be included in the object of taxation):

1. State duty amount;
2. gratuitous provision of goods and services by taxpayers, as well as the difference between the taxable turnover defined by this law and the compensation received in cases of transactions with partial compensation as based on the RA Government decrees;


SECTION 5. PRIVILEGES AND ZERO RATE TAXATION 


Article 15.
The exemption from VAT occurs when VAT is not calculated on taxable turnover.
free consumption provided by public (including benevolent) and religious organizations (deleted expression)

 

PROPERTY TAX


Article 13. Procedure and Terms for Property Tax Payment
1. The organizations pay calculated amounts of property tax in compliance with the part 3 of this article to a relevant budget each quarter by and including the first of the second month following that quarter.
2. The individuals pay annual amounts of property tax in compliance with the part 3 of this article to a relevant budget by and including December 1 of the reporting year, except the case stipulated in part 4 of this article.
3. In compliance with the procedure and in proportions provisioned by the RA legislation, property tax amount is paid:
1) For constructions located within administrative boundaries of the community - to community budget of taxable object' s location, while for those outside the community administrative borders - to the RA state budget; 


Article 15. Property Tax Privileges
The property tax privileges may be determined by the community council through the procedure set by the Government of Armenia.
The amount of privileges set by the community council may not exceed 10% of property tax revenues in the community budget approved for that year.

Law on Charities

In accordance of the "Law on charities" non-commercial organizations – including pubic organizations, foundations, and non-commercial unions of legal persons  are liable to qualify programs as charitable and to receive tax benefits. Commercial organizations are free to implement charitable activities, but will not be entitled to receive tax exemptions. Although, charitable organizations don't automatically entitled to tax benefits, they must have specific programs qualified as charitable, and indeed, need certain qualification for certain programs.

Only non-commercial organizations have the right to apply to the appropriate  Governmental Commission for qualifying their programs as charitable. Such an organization is entitled to tax benefits only within the framework of the qualified project.

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