ORDER OF THE GOVERNMENT OF THE REPUBLIC OF ARMENIA

of November 3, 2017 No. 1373-N

About approval of procedure for forming of reserve (reserve fund) of possible losses on accounts receivable of income tax payers (except for banks, credit institutions, insurance companies and professional participants of the security market), recognitions debit or accounts payable hopeless and their write-offs and recognition of the Order of the Government of the Republic of Armenia of December 19, 2002 No. 2052-N invalid

Accepted the Government of the Republic of Armenia on October 5, 2017

1. Approve:

1) procedure for forming of reserve (reserve fund) for possible losses on accounts receivable of income tax payers (except for banks, credit institutions, insurance companies and professional participants of the security market, accounts receivable which arose as regards physical persons for supply with water users taxpayers with irrigation water, the accounts receivable which arose as regards physical persons for services in supply with drinking water and water disposal by the taxpayers rendering services in supply with drinking water and water disposal, the accounts receivable which arose as regards physical persons for supply with the electric power with the licensed taxpayers distributing electrical energy, performing purchase and sale of electrical energy, the accounts receivable which arose as regards physical persons for supply with natural gas with the licensed taxpayers distributing natural gas performing purchase and sale of natural gas, the accounts receivable which arose as regards physical persons for maintenance of intra house systems of the gas consumption rendered to the population), recognitions debit or accounts payable hopeless and their write-offs according to Appendix No. 1;

2) procedure for recognition hopeless and write-offs of the accounts receivable which arose as regards physical persons for supply with water users taxpayers with irrigation water according to Appendix No. 2;

3) procedure for forming of reserve (reserve fund) for possible losses, recognitions hopeless and write-offs of the accounts receivable which arose as regards physical persons for services in supply with drinking water and water disposal by the taxpayers rendering services in supply with drinking water and water disposal, the accounts receivable which arose as regards physical persons for supply with the electric power with the licensed taxpayers distributing electrical energy, performing purchase and sale of electrical energy, the accounts receivable which arose as regards physical persons for supply with natural gas with the licensed taxpayers distributing natural gas, performing purchase and sale of natural gas, the accounts receivable which arose as regards physical persons for maintenance of intra house systems of the gas consumption rendered to the population according to Appendix No. 3.

Declare invalid the Order of the Government of the Republic of Armenia of December 19, 2002 No. 2052-N "About approval of procedure for forming of reserve (reserve fund) of possible losses on accounts receivable of the organizations (except for banks and insurance companies), recognitions debit or accounts payable hopeless and their write-offs".

3. This Resolution becomes effective since January 1, 2018 and extends also:

1) from January 1, 2017 to January 1, 2018 on the relations provided by subitems "p" and "p" of part 2 of Article 7 and article 18 of the Law of the Republic of Armenia "About the income tax" by that part by what these relations are not adjusted by the Order of the Government of the Republic of Armenia of December 19, 2002 No. 2052-N "About approval of procedure for forming of reserve (reserve fund) of possible losses on accounts receivable of the organizations (except for banks and insurance companies), recognitions debit or accounts payable hopeless and their write-offs";

2) on the relations which arose after January 1, 2016 - as regards the licensed persons distributing electrical energy, performing purchase and sale of electrical energy.

Appendix No. 1

to the Order of the Government of the Republic of Armenia of October 5, 2017 No. 1373-N

Procedure for forming of reserve (reserve fund) for possible losses on accounts receivable of income tax payers (except for banks, credit institutions, insurance companies and professional participants of the security market, accounts receivable which arose as regards physical persons for supply with water users taxpayers with irrigation water, the accounts receivable which arose as regards physical persons for services in supply with drinking water and water disposal by the taxpayers rendering services in supply with drinking water and water disposal, the accounts receivable which arose as regards physical persons for supply with the electric power with the licensed taxpayers distributing electrical energy, performing purchase and sale of electrical energy, the accounts receivable which arose as regards physical persons for supply with natural gas with the licensed taxpayers distributing natural gas performing purchase and sale of natural gas, the accounts receivable which arose as regards physical persons for maintenance of intra house systems of the gas consumption rendered to the population), recognitions debit or accounts payable hopeless and their write-offs

1. General provisions

1. This Procedure governs the relations connected with forming of reserve (reserve fund) of possible losses on accounts receivable, recognition hopeless and write-off debit or accounts payable in case of taxable profit determination (taxation basis).

2. This Procedure extends to the obligations which arose concerning income tax payers (except for banks, credit institutions, insurance companies and professional participants of the security market, accounts receivable which arose as regards physical persons for supply with water users taxpayers with irrigation water, the accounts receivable which arose as regards physical persons for services in supply with drinking water and water disposal by the taxpayers rendering services in supply with drinking water and water disposal, the accounts receivable which arose as regards physical persons for supply with the electric power with the licensed taxpayers distributing electrical energy, performing purchase and sale of electrical energy, the accounts receivable which arose as regards physical persons for supply with natural gas with the licensed taxpayers distributing natural gas performing purchase and sale of natural gas, the accounts receivable which arose as regards physical persons for maintenance of intra house systems of the gas consumption rendered to the population) from the agreements signed with other persons, the legislation governing employment relationships owing to damnification or on other bases provided by the law (further - debit or accounts payable).

3. In sense of application of this Procedure:

1) accounts receivable is the outstanding amount which is subject to payment (to compensation in other form) to the taxpayer other persons (debtors);

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