The Armenian Parliament's Economic Affairs Committee approved the government's proposed tax reforms in a second reading on June 10. The reforms involve changes to turnover tax payments for various sectors, according to the "Arka" agency.
Specifically, the proposal aims to increase the turnover tax in the trade sector from 5% to 10%. However, entrepreneurs will be eligible for a tax deduction of 9.5% of their expenses, but not less than 1% of their turnover.
In the catering sector, the turnover tax will be raised from the current 6% to 12%, with a tax deduction of 9% of documented expenses, but not less than 3.5% of turnover.
The tax rate for manufacturing enterprises will also double to 7%, with a deduction of 5% of expenses.
The turnover tax threshold will remain unchanged at 120 million drams per year (approximately $300,000). Businesses exceeding this threshold will be required to switch to VAT and profit tax.
According to Deputy Finance Minister Arman Poghosyan, although the changes imply an increase in the tax burden, there is hope that the tax burden on entities making documented purchases will be lower because they will be able to include these purchases in their budget expenses and receive tax deductions.
The new changes also stipulate that all professional services, as well as notary and lawyer services, will be moved from the turnover tax category to the VAT category. Specifically, these changes will affect notary offices and legal services, meaning that from January 1, 2025, they will have to pay VAT at a rate of 10%.
