2024
Bill by Ministry of Finance: Transferring professional services from the turnover tax system to the general taxation system
Tax Code
Ongoing

The Ministry of Finance proposed the legislative package which stipulates that the activities listed below should not be allowed to operate under the simplified turnover tax regime:
F 41. Construction of buildings, F42. Civil construction, F43. Specialized construction activities”, L Real estate activities, M69. Legal and accounting activities, M70. Activities of head offices, management consultancy services, M71. Architectural and engineering activities, technical testing and analysis, M72. Scientific research and development, M73. Advertising activities and market research, M74. Other professional, scientific and technical activities, M75. Veterinary activities, Q86. Health care, Q87. Social services to the population with housing and Q88. Provision of the social services without providing housing.
The bill was discussed in the scope of the SME Development Public-private dialogue platform led by the Deputy Prime Minister of Armenia. The Platform members emphasized the importance of reconsidering the original bill and including the impact assessment of the bill on the macroeconomic level. Also, they noted the high probability of many companies going into the shadow economy because of the uneven tax burden due to those changes.
IC Armenia Experts' team, as well as Council members, made several proposals:
1) To take all the activities mentioned in the list out of the bill except the accounting and legal services.
2) Given the fact that transferring accountants and legal services from a simplified tax regime to the general tax scheme, VAT 20% , profit tax 18% might lead them to increase their prices for the companies operational also under the turnover tax regime, it was proposed for the latter to be able to deduct administrative costs (including accounting, legal, etc.) from their quarterly tax sums (as of now the Tax Code does not allow for this).