Changes in the Tax Code aimed at increasing the volume of donations from businesses to higher education institutions,vocational, public institutions

The amendments propose changes in the RA Tax Code to enable the profit tax payers to deduct the donations made to public schools, universities and pre-vocational (craftsmanship), secondary vocational education institutions in the amount of up to 2.5% of their gross income (as opposed to 0.25%) from the tax base with profit tax. The same approach is proposed to be applied to donations to the Military Servicemen's Insurance Fund. The international experience was also studied as a basis for the proposal, which proves that many countries have created more favorable conditions for donations than Armenia. In Georgia, the free supply (provision) of goods and services by legal entities under public law (state schools, research institutes, HEIs, secondary professional institutions) is exempt from profit tax. In the US, organizations and individuals can reduce their tax base by the amount of donations made to scientific, educational, charitable and a number of other institutions, but not more than 10% of the taxable profit at the expense of the allowable amount for the following 5 years. In Finland, donations by organizations of up to EUR 250,000 to certain universities in the European Economic Area are deductible from taxable profits. Donations made to non-profit organizations in Germany are deducted from taxable profits up to 20%.In Italy, donations to schools, universities and scientific research are subject to tax exemptions of up to 10% of taxable profits. Donations made to preschools, educational and scientific institutions in Bulgaria are deducted from the taxable profit in the amount of up to 10%. According to the changes implemented in the Russian Tax Code in 2023. From January 1, provisions will come into force according to which, on the basis of the laws adopted by the subjects of the Russian Federation, it may be established that taxpayers have the right to reduce the profit tax transferred to the budget of these subjects by up to 100% of the value of the property (funds) transferred free of charge to educational organizations. the amounts. At the same time, free provision of property and funds to non-profit educational or scientific institutions owned by the state or community is exempted from VAT. In addition to the countries mentioned above, tax incentives encouraging donations by commercial organizations are also applied in the following countries: Australia, Argentina, Austria, Belgium, Canada, Chile, Czech Republic, Estonia, Greece, Hungary, India, Indonesia, Ireland, Japan, Latvia, Lithuania, Luxembourg , Malta, Netherlands, New Zealand, Norway, Portugal, Romania, Singapore, Slovenia, Republic of South Africa, Switzerland, United Kingdom, Colombia, Israel, Slovakia In these countries, as a rule, the allowable amount of deduction from the profit tax base is significantly greater than the amount applicable in Armenia, provided that the donations are made to charitable or other public good organizations that meet certain criteria. For example, up to 2% of charitable expenses can be deducted from taxable profits in Slovakia, in the Czech Republic: 5%, in Italy, Austria, Spain, Georgia - 10%, in Germany and Switzerland - 20%, in the Netherlands - 50%, in Ireland, UK and Australia - 100%, 7.In France, organizations can deduct up to 60% of their charitable contributions, but not more than 0.5% of their annual income. In Argentina, they can deduct up to 5% of their income amounts can be reduced from the current year's tax base in the amount of up to 7% of the previous year's income.