Adopted Reform: Changes in the Tax Code - Increasing the volume of donations from businesses to State Universities...

We are pleased to announce that the draft law on making amendments to the Tax Code—regarding donations made by businesses to state universities, vocational and secondary educational institutions, and public schools—which was identified within the SME public–private dialogue platform and developed by the expert team of the Ministry of Economy of the Republic of Armenia, the State Revenue Committee, and the Investment Council of Armenia, has been adopted by the National Assembly in the second and final reading. 

Previous surveys have shown that donations play an important role for Armenian universities. They contribute not only to the expansion of their material and technical base, but also to the renovation and furnishing of classrooms, the establishment of laboratories, access to high-value digital software, and the acquisition of other assets aimed at improving the quality of education.

Let us explain what the adopted draft entails. Previously, in the case of donations made to state universities, public schools, and vocational institutions, a company could deduct only 0.25% of its annual gross income from its profit tax base. With the adopted amendment, the deduction threshold has been increased and now stands at 2.5%.

It is important to note that the reform applies not only to monetary donations but also to donated property, equipment, scholarships, educational and laboratory tools, services provided, jointly organized events, and so on. This means that if your company, for example, has donated computers to a state university, you may deduct their value from your gross income—up to the limit of 2.5%.

The aim of the regulation is to increase investments in the fields of education and science through non-state funding, and to strengthen the education (science)–business linkage.