Alert 45
NEW MANDATORY REQUIREMENT WITHIN TAX CONTROL FOR PROVIDING EXTRACTS FROM BANK ACCOUNTS
At the session held on November 23rd of 2023, the RA Government approved a draft “On amendments and additions to the RA Tax Code”, which will establish new mandatory requirements for the availability/provision to the tax authority of statements from taxpayers’ bank accounts and the consequences of not fulfilling that requirement.
According to the draft law, the “bank account statement” will include data on the taxpayer’s bank account, currency, balance as of January 1 and December 31 of the tax year, as well as the total of amounts credited to and withdrawn from the bank account during the respective tax year.
The draft law suggests:
- for the purposes of assessing risks, to establish the possibility of receiving a bank account statement of a taxpayer from Armenian commercial banks, through the RA Central Bank. This possibility is established in respect to taxpayers who have an obligation to pay corporate income tax and individuals who have an obligation to provide income declaration as per the RA Tax Code;
- control function, to establish an obligation for the taxpayer (the corporate income taxpayer and in the corresponding year an individual taxpayer who is obliged to submit an income declaration in the that respective year) to provide a bank account statement upon the request of the tax authority;
- to provide for the possibility of obtaining a bank account statement on the basis of a court decision, if the request of the tax authority (mentioned above) has not been fulfilled voluntarily;
- to establish the possibility of suspending tax control until the provision of the requested bank account statement.
At the same time, the draft law stipulates that the obligation defined by the above-mentioned point 2 will be applied in order for those individuals who, in accordance with the RA Tax Code, are obliged to submit an income declaration in the respective year based on the results of that tax year.
The draft law was approved by the RA government and submitted for discussion to the RA National Assembly. Find more here
NEW REGULATIONS ON THE INCOME TAX REFUND SYSTEM FOR MORTGAGE LOAN SERVICING
At the session held on November 23rd of 2023, the RA Government approved a draft “On additions to the RA Tax Code”, it has been proposed to establish new regulations in the system of “income tax return for the purpose of servicing a mortgage loan”.
In particular, the draft law proposes to gradually (by areas and years) reduce the scope of application of the income tax refund system covering the interest paid by employees for mortgage loan servicing.
In particular, the draft law proposes to indicate that the procedure for the return of income tax will not be applied:
- from January 1st of 2027, if the property is located in Aragatsotn, Ararat, Armavir and Kotayk regions adjacent to the city of Yerevan, except when the real estate is located or under constructio close to the borders of these regions.
- from January 1st of 2029, if the property is located in other regions, except when the real estate is located or under construction near the national borders.
In addition, it has been proposed to establish that the total amount of income tax to be refunded from an Armenian financial institution, after January 1st of 2025, covering the interest paid for servicing a mortgage loan shall not exceed 750,000 AMD for each quarter.
The draft law was approved by the RA government and submitted for discussion to the RA National Assembly. Find more here.
LIMITATIONS FOR THE COMPENSATION OF DIVIDENDS FROM THE STATE BUDGET
At the session held on November 30th of 2023, the RA Government approved a draft “On amendments to the RA Tax Code”, which introduces series of limitations on the opportunity of receiving from the state budget a compensation on the dividends (but not more than the amount of income tax paid to the state budget from dividends) paid by Armenian resident organizations, in cases when the amount equal to the dividends paid by Armenian resident organizations has been invested in the charter or share capital of the same organization.
Particularly, compensation from the state budget will not be made if, during the tax year of the day of filing the relevant application to the tax authority and/or the previous tax year, the Armenian resident organization paying dividends:
- did not submit the tax calculations, declarations, reports, information submitted to the tax authority within the time limits specified in the RA Tax Code 2 or more times;
- had a violation of one of the requirements of certain articles (articles 408, 410, 412, 415 or 416) of the RA Tax Code recorded by respective unchallengeable administrative act;
- had a tax liability in the amount of AMD 5 million or more, in terms of violations revealed by a comprehensive tax audit or study.
It has been proposed to apply the envisaged amendment to the relations of compensation of the income tax amounts arising on the basis of relevant applications submitted to the tax authority after July 1, 2024.
Find more here
REMINDER ON THE DEADLINE FOR COMPLIANCE WITH THE OUTDOOR ADVERTISING STANDARDS
By Decision N 759-Ն adopted by the Council of Elders of Yerevan on April 27, 2023, new mandatory requirements were established to ensure compliance with the form of outdoor advertising, including, particularly, dimensions, height and other standards.
The deadline for ensuring compliance with the standards established by said decision was set until December 31, 2023.
The validity of the permits of advertisement, placement of an advertising mean or other permits issued before the entry into force of the decision will expire on this date as well.
In case of non-compliance with the requirements established by the decision, the Yerevan Municipality intends to start the process of dismantling external advertising means after January 1, 2024.
After complying with the requirements established by the decision, it is necessary to apply to the Yerevan Municipality to obtain a new permit for outdoor advertising.
More detailed information about the established standards here.