LAW OF THE REPUBLIC OF ARMENIA

of June 16, 1997 No. ZR-118

About the value added tax

Accepted by National Assembly of the Republic of Armenia on May 14, 1997

Section 1. Value added tax and payers

Article 1. The value added tax (further - the VAT) - indirect tax which according to this Law is paid (is withdrawn) in the government budget in case of commodity importation, at all stages of their production and the address, and also rendering services in the territory of the Republic of Armenia.

Article 2. It agrees established by this Law procedure, VATes pay the persons who are considered as payers of the VAT and (or) incurring obligations on payment of the VAT.

Article 3. The payer of the VAT is considered registered as performing business activity or the having right to conduct business activity the legal entity, the branch registered in the Republic of Armenia (regardless of the fact whether is the uncommercial organization), the notary of the foreign organization or the individual entrepreneur.

1) since January 1 of this calendar year until the end of this calendar year, for created recently within this calendar year of the person (who received state registration, registered as the individual entrepreneur or appointed by the notary) – from the date of state registration, registration as the individual entrepreneur or appointment as the notary until the end of this calendar year, and for person, within calendar year which stopped to be considered as the subject of family entrepreneurship - until the end of this calendar year if this person as of January 1 of this calendar year or day of state registration or registration as the individual entrepreneur or appointment as the notary or the terminations to be considered as the subject of family entrepreneurship, according to the law, cannot be considered as the taxpayer from turnover or in the terms established by the law did not submit in tax authority of the accounting the written application about formation by the taxpayer from turnover in the form established by the head of higher tax authority, except for the uncommercial organizations having the right to business activity and producers of agricultural products which are considered as payers of the VAT in case and procedure, stipulated in Item 1.1 these Articles;

1. 1) in case of excess of threshold of the VAT of turnover of realization on delivery of goods and provision of services (the performed works) within the previous calendar year as regards all types of activity, since January 1 of this calendar year until the end of this calendar year or within this calendar year from the moment of excess of threshold of the VAT of turnover of realization on delivery of goods and provision of services (the performed works) as regards all types of activity until the end of this calendar year (in case of excess of threshold of the VAT within this calendar year of the VAT it is paid from the amount exceeding threshold of the VAT) or from the date of, specified in the statement in the Republic of Armenia established by the Government to form of formation by the payer of the VAT and registration as the payer of the VAT (further – the single statement) (but not earlier than the 30th day before submission of the single statement) until the end of the year specified in the single statement, if the uncommercial organization, having the right to conduct business activity or producer of agricultural products submitted the single application in tax authority of the accounting (having made mark that are payer of the VAT and have registration as the payer of the VAT);

2) from the moment of excess of threshold of the VAT of turnover of realization of the delivered goods and the provided services (the performed works) for calendar year as regards all types of activity until the end of calendar year. In case of excess of threshold of the VAT within calendar year, the VAT it is paid from the amount exceeding threshold;

3) since that moment of calendar year until the end of this calendar year from which person, according to the law, ceases to be considered as taxpayer from turnover or ceases to be considered as the subject of family entrepreneurship if in the terms established by the Law did not submit in tax authority the application in the form of formation by the taxpayer approved by the head of higher tax authority from turnover." and new offer of the following content: "From the date of emergence of one of the bases for the termination of stay by the taxpayer from turnover to the 30th day after this day person submits the single application in tax authority of the accounting, having specified the corresponding basis and the moment (day) of the termination of stay by the taxpayer from turnover;

4) from the date of, specified in the single statement (but not earlier than the 30th day before submission of the single statement) until the end of the year specified in the statement if the taxpayer from turnover submitted in tax authority of the accounting the single application (that he is considered taxpayer from turnover (having made mark about what is payer of the VAT and has registration as the payer of the VAT).

The size of turnover of realization of delivery of goods and provision of services established by the Law of the Republic of Armenia "About the receipts tax'' for formation by the taxpayer from turnover, in sense of application of this Law, is considered threshold of the VAT, except for the uncommercial organizations having the message right business activity and the cases specified in the subitem "b" of Item 3 of Article 3.1 and the subitem "an" of Item 1 of article 6 of this Law – the physical persons who are not individual entrepreneurs for whom, from the point of view of application of this Law, threshold of the VAT 58,35 of one million dram of turnover of realization on delivery of goods and provision of services is considered.

To the physical persons who are not individual entrepreneurs, the threshold of the VAT is applied in the cases specified in the subitem "'' Item 3 of Article 3.1 and the subitem "and'' Item 1 of article 6 of this Law. As regards the transactions specified in this paragraph the size of obligations is determined by the VAT:

ampere-second of total leviable turnover of transactions on delivery of property or to provision of services if the total leviable turnover of transactions performed by person on delivery of property or to provision of services for previous year exceeded threshold of the VAT,

. from the amount exceeding threshold of the VAT of the amount of total leviable turnover of transactions on delivery of property or to provision of services and total leviable turnover of all transactions performed for the current year if total leviable turnover of the transactions performed by person on delivery of property and (or) provision of services in previous year did not exceed threshold of the VAT.

If the taxpayer, according to the law, is not considered the payer of the VAT and did not submit the single application, but the tax authority based on the statement of the taxpayer in the form established by higher tax authority was registered in tax authority as the payer of the VAT, within one day considers invalid registration of the taxpayer since January 1 of this year as the payer of the VAT.

In sense of this Law the uncommercial organization is considered the business activity having the right to implementation if the law the uncommercial organization is not forbidden to perform these activities.

Article 3.1. If the law does not provide other, when implementing the stipulated in Clause 6 these Laws of transactions (transactions), liable to VAT, obligations on payment of the VAT are incurred:

1) the legal entities who do not have the right to conduct the business activity, the organizations which do not have the status of the legal entity, including, organizations, representative offices of the foreign organizations

2) in the cases established by this Law, the local government bodies and state bodies of management, organizations created by data organ, the Central bank of the Republic of Armenia

3) the physical persons who are not individual entrepreneurs or the notary if:

and. the transactions performed by them, according to the law, are considered as delivery of goods,

. provided such services (except for transactions on real estate lease) or delivered such goods which realization, according to the law, is not considered as illegal business activity,

century they on the territory of the Republic of Armenia import goods which import, according to the Law of the Republic of Armenia "About customs regulation", is considered the import performed for the purpose of business activity or on the territory of the Republic of Armenia cars, except for the cars imported from EEC member countries are imported.

In the cases established by the law and procedure, obligations by calculation and payment of the VAT can be assigned to other persons or equal obligations in management of accomplishment of the obligations on the value added tax which arose from the transactions performed by other person or group of persons can be established.

Article 4. Voided

Section 2. Taxation object and leviable turnover

Article 5. The taxation object on value added all cost (turnover) of the VAT for the territories of the Republic of Armenia of transactions (transactions), the stipulated in Clause 6 these Laws performed by payers of all is considered if the law does not provide other.

Article 5.1. In case of commodity export from the territory of the Republic of Armenia to member countries of the Eurasian Economic Union (further – EEC), commodity import from the territory of member countries of EEC on the territory of the Republic of Armenia, and also in cases of provision of services registered (staying on the registry) in the Republic of Armenia persons to another, unregistered (not staying on the registry) in the Republic of Armenia to persons (or on the contrary), the relations connected with calculation and payment of the VAT are regulated by the Law of the Republic of Armenia "About the value added tax", the act provided by appendix 18 "About procedure for collection of indirect taxes in case of export and import of goods, performance of works and provision of services and control over their payment", which is considered as integral part of the agreement of May 29, 2014 "About the Eurasian Economic Union" if the Law of the Republic of Armenia "About features of calculation and payment of indirect taxes between the Republic of Armenia and member countries of the Eurasian Economic Union" (further – the Law of the Republic of Armenia "About features of calculation and payment of indirect taxes") does not provide features.

Article 6. Transactions (transactions), liable to VAT, are considered:

1) delivery of goods – the transaction which is performed by means of transfer to other person of the property right to goods (including, products and the real estate) for compensation in any form.

Delivery of goods the transaction on alienation untied with business activity (subject to use in the consumer purposes) personal, family property or property for home use (including, apartments, houses (including, unfinished), lands of agricultural purpose and lands of settlements, the car of private use) and the transaction on alienation of property rights by physical persons which is considered as economic activity is not considered if this Law does not establish another.

The transactions performed by the physical persons who are not individual entrepreneurs are considered as delivery of goods in the following cases:

and. property acquisition, being subject of business activity, production, trade and other property of social significance, including the buildings, constructions (including, unfinished) belonging to person of lands or ownership ratios of lands of industrial function, use of subsoil and other production appointment

. in one calendar year alienation two and more times of the following property of the same type – the apartment, the house (including, unfinished), the car of the private use which is property of person or common property, lands of agricultural purpose and lands of settlements, garage for compensation somehow, are considered delivery of goods, property acquisition in the second and more time for this period if alienation is performed for term less than a year after acquisition of this property,

century contribution physical person in authorized or the equity capital of the legal entity in building image, apartments, the house or other construction (including, unfinished) if the share of this contribution belonging to physical person before the expiration of three months after contributing was aloof to other person,

in the procedure established by the law alienation of the building, apartments or other its rooms, individual apartment houses by person who is the builder and (or) the owner apartment (including, multipurpose) houses, the subdivided building, individual apartment houses in residential quarters or complexes (without the non-residential premises which are common ownership), except for to 10 percent from total area apartment (including, multipurpose) houses, the subdivided building, its apartments or other rooms, but no more, than alienation of the area of 500 square meters, and in residential quarters or complexes, to 4 individual houses.

For the physical persons which are not considered by individual entrepreneurs, procedure and terms of representation of the simplified calculations of the VAT and payment of the amounts specified in this Item as regards liable to VAT transactions establishes the Government of the Republic of Armenia, and as regards the goods imported from EEC member countries which import, according to the Law of the Republic of Armenia "About customs regulation", is considered import for the purpose of business activity the tax declaration about import completed with the importer is submitted. This Item is applied also to the physical persons who are individual entrepreneurs if the property specified in this Item is not subject of the business activity performed by the physical person who is the individual entrepreneur.

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