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THE LAW OF THE REPUBLIC OF ARMENIA

Adopted by the
National Assembly on May 14, 1997, in force from July 1,
1997

ON VALUE ADDED TAX ∗

SECTION 1. VALUE ADDED TAX AND PAYERS

Article 1. Value added tax (hereinafter referred to as VAT) is an indirect tax, which in compliance
with this Law shall be paid (levied) to the state budget for imported goods, at all stages of their
production and turnover, as well as provision of services on the territo
ry of the Republic of Armenia.

Article 2. All the physical and legal persons, ent erprises without the status of a legal person
(hereinafter – persons) 1 carrying out independent economic (busin ess) activity in accordance with the
procedure defined by the Law, and implementing trans actions (operations) listed in Article 6 of this
Law.
Economic activity, implemented regularly for the purpose of deriving income (profit), shall be
considered business activity. The activity, performed against any compensation, shall be considered
economic activity.
The citizens of the Republic of Arme nia and foreign citizens, as well as stateless persons (hereinafter –
individuals), who in accordance with the contracts concluded with employers are considered as
employees and at the same time do not implement transactions (operations), defined by clauses 1, 2
and 4
2 of Article 6 of this Law,
shall not be considered as VAT taxpayers.
Physical persons that are not individual entrepreneurs 3 shall be taxed VAT according to the
procedure, defined by this Law and the customs legi slation of the Republic of Armenia, in case of
importing goods into the territory of the Republic of Armenia, provided the quantity or the value of the
imported goods exceeds the rates established by the Law.

Article 3. Legal and individual entrepreneurs are considered to be VAT taxpayers during a given
year, if in the previous year their revenue from transactions defined in clauses 1, 2 and 3 of
Article 6 of this law (including the amount of the taxable turnover calcul ated according to this
law for transactions specified in clause 3 of article 6) exceeded 30 milli
on drams.

Regardless of the mentioned rate, VAT taxpayers are considered to be pe
rsons that:
• exceeded the corresponding thresholds specified by law “On Presumptive Tax”
• are not considered or stop to be considered as simplified taxpayers according to the law “On
Simplified Tax”
• carry out activities taxable both by VAT and by presumptive tax (to the extent of activities
taxed by VAT)

∗ Including all amendments and additions as of 01.01.2002. 1 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 2 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 3 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001.
1

The provisions of the first part of the article do not apply simplified taxpayers carrying out
trading activities through stores and kiosks as specified by the law “On Simplified Tax.

Physical persons that are not individual entrepren eurs are considered to be VAT payers within
the current year if their revenue gained from activities specified in clause 1 and 2 of article 6 of
this Law exceeds 3 million drams. These persons shall calculate and pay VAT for the portion
exceeding 3 million drams.

Regardless of the revenue amount mentioned above, persons who submit applications to the
corresponding tax offices for being considered as VAT payers, will be considered as such
starting from the day of submission of the applications but no sooner than that. The given
persons shall be considered as VAT payers starti ng from the day of declaration themselves as
such and within one calendar year since that moment.
4
The total result of the economic (business) ac tivity of individuals, implementing the economic
(business) activity without taking into account the deductions of the expenditures made (including the
expenses on the purchase of goods) – shall be considered as revenue. In
the field of trade the revenue
shall be considered equal to the turnover.

Article 4. More than one person may act as a single cen tralized VAT taxpayer. The list of such
centralized VAT taxpayers shall be defined by the Government of the Republic of Armenia.

SECTION 2. OBJECT OF TAXATION AND TAXABLE TURNOVER

Article 5. The object of VAT taxation shall be the total value (turnover) of all transactions
(operations), defined by Article 6 of this Law, im plemented by VAT taxpayers within the territory of
the Republic of Armenia, unless provided otherwise by the Law.

Article 6. The following transactions (operations) shall be subject to VAT taxation:
1. Delivery (supply) of goods – a transaction that is implemented by transferring the ownership
right of goods (including output and real estate) to other person agai
nst compensation.
Alienation of the personal property of individuals, with the exception of cases defined by this Law, shall not be considered as delivery of goods.
2. Rendering of services – a transaction (operati on) other than delivery of goods, implemented
against any form of compensation, including the sales (transfer) of intangible assets. The lease
of goods and real estate shall be also considered as rendering of servic
es.
3. Free or partially free consumption – free delivery of goods or provision of services performed
by VAT payers pursuant to the procedure define d by this Law, to the mentioned or other
persons, or delivery of their goods and provision of services at significantly lower prices for
such transactions (operations), with the excepti on of cases provided by the Law or in cases
specified by the Law – by other decrees .
5
4. Importing goods by “Importing for Free Turnov er” customs regime, with the exception of
cases designed by law.
VAT is calculated and collected for goods impo rted into the territory of the REPUBLIC OF
ARMENIA on the border by customs o fficials, with the exception of:

a) goods included in the list defined by law, the cust oms duty for import of which is defined as 0
percent and which are not excise taxable.
4 Parts 1, 2, 3 and 4 of Article 3 – with amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from
01.01.2002. 5 Article 6 was amended according to RA Law “On Amendments and A dditions to RA Law “On VAT”” adopted by RA National Assembly on
26.12.1997, in force from 31.12.1997.
2

b) Has become invalid. 6

Article 7. The following shall not be subject to VAT taxation (shall not be object
of taxation):
1. state duty amount 7;
2. Based on the RA government decrees,
– gratuitous provision of goods and services by taxpayers
– in case of transactions with partial co mpensation, the difference between the taxable
turnover defined by this law and the received compensation. 8
3. services rendered gratuitously by seller of good s within warranty period defined by public
contracts, as well as goods within the confines of these services not meeting quality
requirements, gratuitous replacement of goods’ sp are parts, rendering of services and supply
of goods the value of which is included in th e cost of goods supplied and serviced rendered
according to public contracts ;
9
4. transactions on the change of the ownership right (i ncluding transactions on privatization) in regard
to the legal person, enterprise without the status of a legal person, as well as transactions on
denationalization;
5. transactions on reorganization 10 of a legal person, enterprise without the status of a legal person;
6. lease transactions of leasehold enterprises, created on the basis of sta
te enterprises;
7. Has become invalid 11
8. Has become invalid 12
9. turnover on the sales of values and treasures without owner, inherited to the state or bought by the
latter;
10. sale of property or property rights to the state in form of confiscation
or donation ; 13
11. delivery of goods and rendering of services by the budgetary institution
s of the Republic of
Armenia – in the part, the revenue from which is completely credited to the state or municipal
budgets ;
14
12. import of goods for personal consumption specified by the Law, implemented by
individuals ; 15
13. import of the personal property by citizens, enteri ng the Republic of Armenia for permanent
residence; 16
14. Has become invalid. 17
6 According to RA Law “On Amendments and Additions RA Law “On VAT”” in force from 01.01.2002. In itial text – “goods imported into the territory
of the Republic of Armenia, the turnove r of which is VAT exempt according to clause 20 of article 15 of this law.” 7 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 8 With amendment according to RA Law “On Amendments a nd Additions to RA Law “On VAT”” in force from 01.01.2002. 9 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 10 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 11 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “in case of recognizi ng a legal person, enterprise without the status of a legal person, or a private entrepreneur as insolvent
according to the court decree – transactions on the sales of their property pursuant to the procedure established by the Law;”
12 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “transactions on th e sales of the property (including collateral) confiscated pursuant to the proced ure established by the Law;”. 13 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 14 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 15 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.199 7, in
force from 31.12.1997. 16 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 17 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “import of goods deemed to constitute th e property of foreign customers, imported for the purposes of processing on the
territory of the Republic of Armenia and export thereof afterwards within the terms of export after processing provided by the contract, but not later than

3

Article 8. The turnover subject to VAT taxation shall be determined pursuant to the following
procedure:
1. The VAT taxable turnover in case of the delivery of goods and services shall be the value thereof in
terms of money (including other payments joined to this value pursuant to the Law) exclusive of
cases of export of goods as well as
18 VAT which must be paid by the purchaser to the supplier as
an indemnity.
The value of multiple use returnable containers shall not be included in the turnover subject
to VAT, with the exception of cases when th e container is sold directly by the producer 19 or
the importer 20.
2. For goods imported to the Republic of Armenia, the amount of their customs value
determined in accordance with the pro cedure established by the Law, and the customs duty and
excise tax levied 21 shall be considered as the turnover subject to VAT at the moment of import 22.
3. The turnover subject to VAT while importing goods which, pursuant to the procedure defined by
the customs legislation, have been earlier exported from the territory of the Republic of Armenia by
VAT payers for the purpose of processing or repair , shall be the value of processing and repair
[thereof] which must be paid as an indemnity to foreign legal persons, enterprises without the status
of a legal person, or to foreign citizens and stateless persons (hereinafter – foreign individuals); an
d
in case of impossibility to define the value in que stion – the difference between the customs value of
the import of goods after processing and repair and the customs value declared while exporting
thereof.
4. When conducting VAT taxable entrepreneurial activities in the Republic of Armenia by
foreign entities (including import of goods belo nging to the mentioned entities) not registered
as entities conducting entrepreneurial activities in the Republic of Armenia, entities of the
Republic of Armenia (citizens, individual en trepreneurs, legal entities, local government
entities and state entities) that are parties of contract relations (including contractors) shall
carry the tax responsibility instead of foreign en tities in terms of the mentioned activities
conducted by order and within deadlines defined. In terms of these activities VAT taxable
turnover shall be determined by order defined by this article.
23
5. In case of goods and services provided on the basis of assignment, commission or agency, the
taxable turnover is considered to be the medi ator fee (charge, bonus or other type of
compensation) without VAT, unless otherwise speci fied by the law or other legislative acts.
24
6. Gratuitous supply of goods, gratuitous rendering of services, as well as in cases when for the
given activities (transactions) prices lower than actual value in comparison to usual prices are
applied (partial compensation), taxable object shall be considered to be the value (cost of
transaction, payment, compensation, prize or the value of other money payment) determined
according to this law and cons idered as taxable turnover under circumstances comparable for
similar transactions. In case if such a value is missing, taxable object shall be considered to be
during one year, in case of a liability for the exports of the goods in question. In case of the actual failure to export these goods within the set term, the
imposition of VAT, including fines accrued for the delay of VAT paym ent, shall be performed according to the procedure established by the
legislation.” (with amendments of 20.08.98).
18 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001. 19 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.199 7, in
force from 31.12.1997. 20 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. 21 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 22 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.199 7, in
force from 31.12.1997. 23 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 24 With amendment according to RA Law “On Amendments a nd Additions to RA Law “On VAT”” in force from 01.01.2002.

4

the amount (the actual value of transaction) usually considered as a taxable object for similar
transactions in business spheres under comparable circumstances. 25
7. The taxable turnover for barter transactions (operations) shall be det
ermined according to the
procedure established by this Law for the deliver y of goods and provision of services on the basis
of their price exclusive of VAT applied usually at the moment of the delivery of these goods and
services.
8. In case of delivery of goods subject to the excise tax, the amount of the excise tax shall be also
included in the VAT taxable turnover.

SECTION 3. TAX RATES

Article 9. The rate of VAT shall be determined in th e amount of 20% of taxable turnover of goods
and services.
The amount of VAT within the amount of the tota l indemnity for the goods and services (including
20% rate) shall be determined at the rate of 16.67%.

Article 10. The zero rate of VAT shall be estimated fo r the taxable turnover of goods and services
defined in Article 16 of this Law.

Article 11. VAT may be replaced by fixed payments (pre sumptive tax) defined by the Law for certain
VAT payers, groups of taxpayers, or certain types of transactions and op
erations.

SECTION 4. PLACE OF SUPPLY OF GOODS
AND PROVISION OF SERVICES

Article 12. The place where goods are located and where th ey are to be delivered from shall be
considered as the place of supply. The goods in the Republic of Armenia shall be considered supplied,
if:
a) they were unloaded and delivered to the purchaser (customer) on the territory of the Republic of
Armenia;
b) they were exported from the Republic of Armenia.
The imported goods shall be considered as delivered in the Republic of Armenia from the moment of
the import.

Article 13. The service shall be considered as rendered in the Republic of Armenia, provided that the
place of rendering thereof is within the territory of the Republic of Ar
menia.
The place of rendering of services shall be the place where the service
provider implements business
activity, and in case of the absence of such place or impossibility of determining it – the place of
location ( domicile or place of residence, with the ex ception of the cases defined in Article 14 of this
Law) of the mentioned person.

Article 14. The place of rendering of services related to the real estate, including services rendered by
the agents and experts on rent, brokerage, preparation and implementation of construction (including
projecting, exploration, supervision and other related services) shall
be the place where the real
property is located or is planned to be constructed.
25 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001.

5

The place of provision of transport services shall be the place where the transportation of loads, post,
passengers and baggage starts from. The place of provi sion of services on the transportation of loads,
post, passengers and baggage by the routes starti ng and not interrupting on the territory of the
Republic of Armenia, supported by the single interna tional documentation (hereinafter – international
transportation), shall be outside the territory of the Republic of Armenia.
The place of provision of services in the field of culture, art, sport, science, education and public
health (including services necessary for their organization), supporti
ng transport services ( loading and
unloading of goods, handling, storage of loads and ot her services), services on assessment, repair,
placement of movable property and other similar serv ices shall be considered the place where these
services are actually rendered.
In case when services on the re-concession of pate nts, licenses, copyrights, trade marks and other
similar rights, advertising, consulting, engineeri ng, legal, accounting, expert, translating, and other
similar services, as well as serv ices on data processing, provision of software
26 and information,
banking, financial and insurance services (with the ex ception of the lease of safes), lease of movable
property (with the exception of the lease of any means of transport) are rendered by the persons
registered in the Republic of Armenia to foreign le gal persons, persons without the status of a legal
person, or individuals (or vice versa), the place of provision of services shall be the place where the
person who receives the service implements business activity, or has a permanent office, to which the
mentioned services are rendered, or in case of th e absence thereof – the domicile or the place of
residence of the person.
The place of provision of services, when leasing the means of transport, shall be the place where the
lessor implements business activity, or in case of th e absence of such place – the domicile or the place
of residence of the lessor.
For the postal and electronic mail services rendered fr om the territory of the Republic of Armenia to
the territory of a foreign country the place of provisi on of services shall be the territory of the foreign
country in question. For the postal and electronic mail services rendered from the territory of a foreign
country to the territory of the Republic of Armenia the place of provision of services shall be the
territory of the Republic of Armenia.

SECTION 5. PRIVILEGES AND ZERO RATE TAXATION

Article 15. The exemption from VAT shall be th e non-accrual of VAT on taxable turnover. The
following transactions and operations mentioned in clauses 1, 2 and 3 of Article 6 of this Law 27
shall be exempt from VAT:
1. Has become invalid; 28
2. secondary schools, vocational schools for qualification and re-qualification 29, specialized-
secondary and higher educational institutions – in the part of the fee f
or education;
3. sales of copy-books and music books, albums for drawing, children’s and school literature,
school educational publications; sales of scient ific and educational editions published by
higher educational institutions, specialized scie ntific organizations and the National Academy
of Sciences of the Republic of Armenia ;
30
4. scientific and research works;
26 With addition according to RA Law “On Amendments to RA Law “O n VAT”” adopted by RA National Assembly on 28.12.1998, in force fr om
01.01.1999. 27 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.199 7, in
force from 31.12.1997. 28 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “services on transportation of passengers by the passe nger electric transport (trolley-bus, tram, metro and cable railway);”. 29 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001. 30 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997.
6

5. Has become invalid; 31
6. sales of veterinary medicines 32, sales of poisonous chemicals us ed in agricultural production,
fertilizers, agricultural plants and seeds of perenni al plantations and planting material to the
producers of agricultural production;
33
7. sales of agricultural products, produced in the Republic of Armenia, by the producer;
8. services related to the care of children in pr eschool institutions, care for persons in boarding-
schools, children’s homes, institutions caring for di sabled children and invalids, in nursing homes,
as well as sales of goods produced and services rendered by the persons living at the expense of
these institutions;
9. Has become invalid ; 34
10. sales of newspapers and magazines;
11. provision of services by undertaker’s offices, cemeteries, as well as other services of ritual
character and sales of respective accessories related to the death and b
urial;
12. religious ceremonies, sales of religious items to the religious organizations, as well as sales of
these items by the religious organizations ; 35
13. Has become invalid; 36
14. sales of lottery tickets at the face value;
15. insurance and reinsurance operations, including services related to them
, which are rendered by
insurance mediators and agents;
16. operations related to the pension insurance, incl uding services related to them, which are rendered
by mediators and agents;
17. the following financial operations and transactions:
– receipt of deposits at call, time deposits, savings and other similar investments, opening, keeping
and serving of banking and investment account s, including provision of settling services;
– provision of credits (loans), including the coveri ng of liabilities and the financing of commercial
transactions, and other factoring operations;
– provision of guarantees, bank guarantees, opening of letters of credit;
– issue, placement, purchase, sale of securities, including their purchase for the purpose or on the
terms of resale, receipt for safe keeping and accounting;
– issue, purchase, discount, transfer, concession or se rvice of promissory notes, checks, orders, other
payment securities, payment documents, cards and other instruments;
– purchase, sale and exchange of foreign currency (banknotes or metal money, with the exception of
coins and bank tickets having numismatic meaning and used for this purpose), futures, options in
Armenian drams and foreign currency, and performance of other similar transactions;
– cash withdrawal services;
– provision of services of a financial agent (representative) by bank;
– trust or other management of other persons’ investments;
– purchase, sale of the standard (of bank) precious metals bullion, opening and keeping of
accounts expressed by them, implementation of other operations with them;
– Has become invalid; 37
31 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “sales of baby food;”. 32 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. Important Note: this amendment is not reflected in the final Ar menian text (non-official publication) of the Law. 33 With amendment according to RA Law “On Amendment to RA Law “On VAT”” adopted by RA National A ssembly on 21.10.1997, in force from
01.01.1998. 34 According to RA Law “On Amendments and Additions to RA Law “O n VAT” in froce from 01.01.2002. Initial text – “radio broadcasting and TV-
broadcasting not compensated by th e users, including the receipt of means from th e third persons for the purposes of such broadcasting;” 35 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.199 7, in
force from 31.12.1997. 36 According to RA Law “On Amendments and Additions to of RA La w “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “sales of postal services, postal stamps , postcards and envelopes, as well as sales of state duty stamps at the face value;”. 37 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “finance lease;”.
7

– brokerage and other intermediary services;
– Has become invalid; 38
– sales of collateral previously belonging to physical persons not considered as individual
entrepreneurs, that has become the property of the bank according to the procedure
specified by Law;
39
– services on acceptance of money (revenue, obligatory, housing and other payments), as well as on
provision of payments on wages, pensions, benef its, insurance payments, etc. according to the
contracts concluded.
– The registration and issue of certificates and refe rences related to the services provided by this
clause, production of securities, checks, orders , payment documents, cards, banknotes and metal
money, bank gold, facsimile services shall not be exempt from VAT.
18. Has become invalid; 40
19. sales of donor blood, breast milk, prosthetic and orthopedic items, (deleted words) 41, medical
assistance services (including prophylactic diagnostic measures), goods related to the treatment and
prepared within the frames of medical assist ance by the patients in prophylactic enterprises and
organizations, and services rendered by them;
20. Has become invalid; 42
21. delivery of goods and provision of services, according to the procedure established by the
Government of the Republic of Armenia, 43 on the account of preparat ion facilities of credit and
grant programs of international financial organizations ; 44
22. free (deleted expression) consumption (deleted expression) provided by public (including
benevolent) and religious organizations (deleted expression) ; 45
23. Has become invalid; 46
24. sales of bread; (in force until 31.12.97) 47
25. sales of black oil; (in force until 31.12.98) 48
26. sales of precious and semiprecious stones indicate d in the list specified by the Government of
the Republic of Armenia. 49
38 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “acceptance of secur ities, precious metals, stones, jewelry items, other values and documents by bank for safe keeping;”. 39 With amendment according to RA Law “On Amendments and Additions to of RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000,
in force from 01.01.2001. 40 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “lease of state, m unicipal and departmental housing funds, the service fee charged from the owners of privatized apartments,
the fee for living in hostels, services established by the legi slation and rendered by condominiums, building cooperatives to their members;”.
41 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “medicines, medicaments”. 42 According to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. Initial text – “delivery of goods and
provision of services by foreign states, in ternational intergovernmental (interstate) organizations, international, foreign and operating in the Republic of
Armenia public (including benevolent), relig ious and other non-state organizations of the similar character, individual philanthropists within the
framework of humanitarian assistance and ch arity (other similar public and social) programs (activity), as well as delivery of goods and provision of
services directly related to the implementation of such programs and being significant for them.
The differentiation of programs (activity) between humanitari an assistance and those of the charity and technical (or other) character in case of the
absence of a direct indication thereof in the legislation of th e Republic of Armenia (including international agreements of the Republic of Armenia), as
well as the circle of goods and services exempt from VAT pursu ant to the provisions of this Article, shall be determined by order defined by the
Government of the Republic of Armenia in the field of coordination of humanitarian assistance;”
43 With addition according to RA Law “On Amendments to RA Law “O n VAT”” adopted by RA National Assembly on 28.12.1998, in force fr om
01.01.1999. 44 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 45 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text of point 22– “free (o r with partial compensation) consumption and one-time or irregular sales of goods and services provided by
public (including benevolent) a nd religious organizations in the course of the year;”.
46 According to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. Initial text – “operations related to the receipt
and issue of patents, copyrights and licenses;” 47 With addition according to RA Law “On Additions to RA Law “On VAT”” adopted by RA National Assembly on 30.09.1997, in force from
08.11.1997. 48 With addition according to RA Law “On Additions to RA Law “On VAT”” adopted by RA National Assembly on 30.09.1997, in force from
08.11.1997.
8

Article 16. Zero rated taxation by VAT is the application of zero rated VAT on the sales
turnover of activities specified in this article (hereinafter, taxable turnover). 50
The zero rate of VAT shall be applied:
1. to the taxable turnover of goods exported by “Export for free turnover” Customs regime 51
outside the customs border of the Republic of Ar menia, as well as the fuel for airplanes of
international flights, and supply of the goods for consumption during the flight for the staff and
passengers of airplanes.
When exporting goods purchased in the Republic of Armenia by foreign persons 52, the amounts of
VAT paid for the goods in question on the territory of the Republic of Armenia shall be returned to
them (deleted expression)
53 according to the procedure established by the Government of the
Republic of Armenia;
2. to the retail sale of goods for passengers of intern ational routes in airports, in places specially
allocated for that purpose beyond customs and pass port control territories, provided that the goods
have passed customs registration prior to being on sale pursuant to the procedure established by the
customs legislation for the export of goods from the territory of the Republic of Armenia;
3. Has become invalid; 54
4. Has become invalid; 55
5. to the taxable turnover of services (deleted words), maintenance (including aeronavigation, take-
off and landing services), repair and re-equipment (deleted words) of the means of transport for
international transportation, as well as services rendered to the passengers, baggage, cargo and post
of international flights and services rendered to the passengers during
the flight;
56
6. to the taxable turnover of services (including of agencies and mediatory services), directly related to
the provision of services defined in clause 57 5 of this Article;
7. to the taxable turnover of services on processing and assembly of products from the raw material,
semi-manufactured goods, and materials of foreign legal persons, enterprises without the status of a
legal person, or individuals according to their orde rs, services on the repair and modernization of
movable property on the territory of the Republic of Armenia and other similar services exported
outside the customs border of the Republic of Armenia in conformity and within the terms
established by the customs legislation of the Republic of Armenia;
8. to the taxable turnover of services, whose place of provision is outside the domestic territory of the
Republic of Armenia in accordance with this Law;
9. Has become invalid; 58
10. Has become invalid; 59
49 With addition according to RA Law “On Addition to Article 15 of RA Law “On VAT”” adopted by RA National Assembly on 13.12.2000, in force
from 15.01.2001.
50 With amendment according to RA Law “On Amendments a nd Additions to RA Law “On VAT”” in force from 01.01.2002. 51 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 52 With amendment according to RA Law “On Ame ndments to RA Law “On VAT”” adopted by RA National Assembly on 28.12.1998, in force from
01.01.1999. 53 With deletion according to RA Law “On Amendments to RA Law “On VAT”” adopted by RA National A ssembly on 28.12.1998, in force from
01.01.1999. Initial text – “by Customs bodies”. 54 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “to the taxable tur nover of services (loading, transportation, unloading, storage, etc.) directly related to the supply of goods
defined in clauses 1-2 of this Article;”.
55 According to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. Initial text – “to the taxable turnover of
services on international transportation of passengers, baggage, loads and post by all th e means of transport in the part of transportation implemented
outside the territory of the Republic of Armenia”.
56 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “on supply”; “and lease”. 57 With amendment according to RA Law “On Amendments a nd Additions to RA Law “On VAT”” in force from 01.01.2002. 58 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “to the taxable tur nover of goods and other articles transported through the RA Customs border according to the order
defined by the special Customs Regime in cases specified by RA Customs Code;”.

9

11. to the goods imported or purchased on the territory of the Republic of Armenia for the official use
of diplomatic representations and consular institu tions, as well as international intergovernmental
(interstate) organizations deemed equal thereto, and services rendered to them;
12. to the transit transportation of foreign loads through the territory of the Republic of Armenia.
When implementing transactions (operations ) taxable at zero rate, the amounts of VAT for the
purchased goods and rendered services indicated in the tax accounts, submitted by the suppliers,
shall be subject to refund (set-off) according to the general procedur
e established by this Law.

Article 17. Other Laws may establish privileges of the exemption from VAT and other privilege
s
established by the tax legislation of the Republic of Armenia . 60

SECTION 6. PROCEDURE ON CALCULATION
AND PAYMENT OF VAT

SUBSECTION 1. PROCEDURE ON FILLING IN CALCULATION DOCUMENTS

Article 18. In accordance with this Law, VAT payers must make out tax accounts in case of
delivery of goods and provision of services subj ect to VAT. A calculation document of a set
pattern attesting the delivery of goods and provision of services and filed up in accordance with
Article 20 of this Law shall be considered tax account.
61

Article 19. Tax accounts shall not be made out:
1. by persons not being VAT payers;
2. for goods and services exempt from VAT by the Law;
3. for transactions (operations) not subject to taxation or subject to zero rate taxation pursuant to this
Law.
In the above-mentioned cases other calculation (i ncluding the documents related to the goods) and
payment documents shall be filled in (drawn up) according to the general procedure.

Article 20. The following data must be necessarily indicated in the tax account:
a) serial number and the date of making out the account;
b) name and domicile of the person, name, surname a nd the place of residence of the individual, who
unloads goods and renders services, the taxpayer’s identification number (TIN) 62, the VAT
payer identification number, in case such a procedure is specified by the RA government 63;
c) name and domicile of the person, name, surname a nd the place of residence of the individual who
receives goods and services;
d) denomination and quantity of goods, or the type and volume of services;
e) the price and the total value of goods, or the tari ff and the total amount of payments for services
exclusive of VAT;
f) the calculated amount of VAT (as a separate line);
59 According to RA Law “On Amendments to RA Law “On VAT”” adopt ed by RA National Assembly on 28.12.1998, in force from 01.01.1999. Initial
text – “to the construction and related (des ign, research and other) works that are carried out within the frameworks of humani tarian aid, charity and
other social programs financed gratis by Diaspora communities, foreign states, forei gn and international intergovernmental (interstate) or non-
governmental (public and other of similar character) a nd religious organizations, individual benefactors;”.
60 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 61 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 62 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.199 7, in
force from 31.12.1997. 63 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002.

10

g) other information provided by the Government of the Republic of Armenia.
Checks (coupons) given for the delivery of goods (provision of services) by persons implementing
activity in the sphere of trade and services may also serve as a tax account, provided that they contain
information indicated in clauses “a” and “b” of this Arti cle, as well as the total value of goods and
services and the amount of VAT included in it
64. In case of the absence of certain data, the latter
must be indicated in the tax account filled in pursuan t to the established procedure and enclosed to the
check.
A retail tax account (check) shall be made out to foreign individuals, who are not VAT payers, in
connection with the refund of the amounts of VAT paid for the goods purchased in the Republic of
Armenia at the moment of export.
When purchasing goods in the field of retail trade and receiving services, the VAT payers must make
out tax accounts containing the information defined in this Article, at the request of the purchasers
(customers).
According to this law, entities considered as VAT payers, after the reporting period by the 25 th
of the month following the reporting period, sh ould submit to the corresponding regional tax
inspectorates information on tax invoices issued by suppliers within reporting period for goods
procured and services provided and tax invoices issued (for customers)
by themselves for goods
supplied and services rendered. Note, that VAT payers should include data only on those
received or issued tax invoices, the taxable turnover completed in which does not exceed the
amount defined by the Government of the Republic of Armenia this informa
tion.
65

Article 21. The calculation and imposition of VAT by custom s bodies for the import of goods into the
Republic of Armenia shall be carried out on the basi s of customs declarations and payment documents
(payment order, receipt, or other documents attesti ng the payment) filled in during the registration at
customs office.
Article 22. Pursuant to this Law, VAT payers must keep the accounting in chronological order and
keep all the copies of tax accounts given by them , accounts attesting the payments of VAT for the
receipt of goods and services, declarations attesting the payment of VAT to the customs bodies when
importing goods, as well as other documents related to the calculation and payment of VAT for at least
three years from the date of making out the listed documents.

SUBSECTION 2. PROCEDURE ON VAT CALCULATION

Article 23. According to this Law, the VAT payers shall pay to the budget within th
e reporting period
the amount of VAT calculated on the taxable tu rnover of taxable transactions (operations)
implemented in this period with the deduction (set-off) of:
1. the amounts of VAT indicated in the tax accounts submitted, according to the procedure established
in Subsection 1 of Section 6 of this Law, by the suppliers of goods (in
cluding fixed assets),
intangible assets acquired for industrial and comme rcial purposes within the reporting period in the
domestic territory of the Republic of Armenia, and services rendered , except for the VAT
amounts on the tax invoices for transactions specified by article 24
1 of this law. The VAT
amounts on tax invoices issued for transactio ns carried out from January 1, 2002 till January
1, 2006 shall be credited within the reporting p eriod during which the goods and services were
paid for
66.
Deleted part. 67
64 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 65 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001. 66 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. 67 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “In case of the ac quisition of fixed assets the amounts of VAT indicated in tax accounts of supplier s shall be set off (deducted)
from the moment of acquisition:
11

2. the amounts of VAT withheld (or subject to w ithholding) by customs bodies of the Republic of
Armenia – for goods imported into the territory of the Republic of Armenia – pursuant to the
procedure and rates established by the Law, in cas e when the withholding of VAT at the moment of
the import of goods is provided by this Law.
According to article 3 of the law entities that have become VAT payers and have registered at
tax inspectorates correspondingly, shall credit VAT amounts (collected by Customs entities)
specified in tax invoices of suppliers in terms of goods procured (imported) and services
provided after the moment they have become VAT payers according to article 3 of this law.
In case of loss of goods (including natural loss) procured for production or other commercial
purposes by VAT payers with volume not exceeding that of defined by the Government of the
Republic of Armenia, the VAT amounts paid (speci fied in tax invoices and Customs documents)
to suppliers (in cases defined by law – on customs border) (deleted words)
68 are not subject to
crediting or return 69, provided that the losses are not co nsidered as reduction from gross
revenues for profit taxation purpose . 70

Article 24. Has become invalid 71
72Article 24 1. Before January 1, 2006 for provision of good and services to the publi
c in respect
of water, irrigation, and sewage as well as provision of good and services under the Law on
Procurement, VAT responsibility arises at th e time of payment against provided goods and
services.
In order to apply the present article, during th e reporting period the VAT amount calculated
against the taxable turnover of taxable op erations and the VAT amount received from
beneficiaries (customers) shall be paid, of whic h the following amounts shall be deducted, which
during the same reporting period:

1) were paid to the suppliers against domestic ally purchased goods (including capital goods),
non-material assets, and services for production or other commercial activity, to the extent of
VAT amounts on tax invoices as specified by sub clause 1 of section 4 of
this law.

2) were paid to Customs offices of RA against goods imported to the country, in accordance to
the procedures and amounts specified by law.

a) one time, provided that their purchase price (e xclusive of VAT) does not exceed 10 million Drams; b) in equal parts within the period of six months, provided that their purchase price (exclusive of VAT) exceeds 10 million Dra ms;”. 68 With deletion according to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. Initial text – “within the
reported period” 69 With amendment according to RA Law “On Amendments a nd Additions to RA Law “On VAT”” in force from 01.01.2002. 70 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001. 71 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force fr om
01.01.2001. Initial text – “The moment of th e rise of the VAT liability (including the payment of VAT into the budget) for tran sactions and operations
on the production, transportation and sales of natural gas, electric and thermal energy, drinking and irrigation water, drainage and cleaning of sewage,
garbage disposal and sanitary cleaning services, wire broadcas ting services, railway transportation, as well as for the delivery of goods and provision of
services in accordance with Laws and other legal acts regulating st ate purchases and state order, shall be determined by the moment of payment for the
goods (work, services), irrespective of the methods of determination of the revenue from the sales.
For the purposes of the application of this Article, the amount of VAT calculated on the taxable turnover of transactions (oper ations) implemented in the
reported period and received from the purchasers (customers) shall be subject to pay to the state budget within the reporting period with the deduction
(set-off) of the amounts of VAT paid within the same reporting period:
1) to the suppliers of goods (including fixed assets), intangible assets purchased on the domestic territory of the Republic of Ar menia for industrial and
other commercial purposes, and services rendered – in the amount s of VAT indicated in tax accounts submitted pursuant to the procedure established
in Subsection 1 of Section 6 of this Law;
2) for the goods imported into the territory of the Republic of Armenia – in the amounts of VAT imposed by Customs bodies of the Republic of
Armenia pursuant to the procedure and rates established by the La w, in case when the imposition of VAT at the moment of importing goods is
provided by this Law.”.
72 Article 24 1 – with addition according to RA Law “On Amendments a nd Additions to RA Law “On VAT”” in force from 01.01.2002.

12

Article 25. VAT amounts subject to credit in terms of zero rated VAT taxable transactions, shall
be credited to other tax liabilities of VAT payer or shall be reimbursed to payers according to
results of the reporting period – within 30 days based on corresponding certificate substantiating
the amount issued by tax entities (except for the amounts rising in terms of black and color scrap
metals). Note, that the mentioned amounts shall be reimbursed from the state budget based on
priorities – on the account of available VAT rev enues in state budget during the days following
issuance of the corresponding certificate.
Within reporting period, the difference rising from VAT amounts (the exceeding amount)
subject to credit from VAT amounts calculated against taxable turnover according to order
defined by article 23 of this law, shall be cred ited by payers on the account of VAT amounts
subject to payment for goods to be supplied and services to be rendered in the Republic of
Armenia during the future reporting periods. In cases designed by article 40 of this law, the
difference subject to credit from VAT amounts calculated against taxable turnover (the
exceeding amount) shall be subject to reimbursement by order defined by the first section of this
article.
In case of carrying out other transactions along with transactions taxable with zero rated VAT,
VAT payers shall conduct separate accounting. In case if conducting of such accounting is
impossible, VAT amounts subject to reimburseme nt or crediting on the account of other tax
liabilities in terms of transactions taxable by zero rated VAT, shall be determined by order
defined by the Government of the Republic of Armenia based on ratio to t
otal of zero rated
taxable transactions within total taxable turnover.
Taxpayer right of crediting tax amounts calculat ed against turnover or getting reimbursement
from state budget may not be sold to other pers ons, except for cases of re-form of organization
or death of a physical person, when this right transfers to the corresponding legal successor.
73

Article 26. In cases described in Article 23 74 of this Law the amounts of VAT indicated in tax
accounts of suppliers (in case of import – in cust oms declarations) shall not be set off (deducted):
1. by entities who are not VAT payers;
2. for transactions (operations) as well as transactions which are not controlled by this law, 75 not
subject to taxation pursuant to Article 7 and ex empt from VAT in accordance with Article 15
of this Law. The amounts of VAT indicated in tax accounts (in case of import – in customs
declarations) of suppliers in cases defined in th is clause shall be added to the purchase price
of the goods or to the cost of production and turnover except for the cases specified in clause 3
of article 7 of this law
76.
Except for the case of export of goods, the regu lations defined by this clause shall apply 77 also to
the purchasers of multiple use returnable contai ners purchased directly from the producer or
directly from the importer
78 – in the part of the containers in question, as well as to the entities
making fixed payments substituting for VAT pursuant to the procedure established by the
Law.
As mentioned in this section, VAT amounts dir ectly related to operations during the current
reporting period deducted in the previous reporting period are subject to restructuring and must
73 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 74 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. Initial te xt – “Articles 23 and 24”. 75 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001.
76 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001. 77 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 78 With amendment according to RA Law “On Amendments a nd Additions to RA Law “On VAT”” in force from 01.01.2002.

13

be added to the price of acquisition of goods and services or to the production and sales cost. The
provisions of this paragraph apply for the procurements made after Decem
ber 31, 2001. 79
3. for the goods and services purchased and/or used 80 for non-production (non-commercial)
purposes, with the exception of the cases of free (or with partial compensation) provision of
goods and services.
81
Deleted part 82
Deleted parts. 83
4. the negative difference between the accrued VAT liabilities from VAT taxable operations
and VAT credits accrued on tax invoices (custo ms declarations) of providers of goods and
services in respect of the said VAT taxable operations of purchase (import).
84

Article 27. In case when persons, who are VAT payers pursuant to this Law, implement transactions
(operations) that are taxable and exempt from VAT (a s well as not subject to taxation) at the same
time, they may set off (deduct from the amount of VAT subject to pay to the state budget) only the
amounts of VAT related to the goods and services purchased for the implementation of taxable
transactions (operations), (including the amounts charged by customs bodies). For this purpose the
VAT payers must keep separate accounts for operati ons taxable and exempt from VAT (as well as not
subject to taxation), as well as for the services and goods purchased for performing them. In case when
it is impossible to keep separate accounts, the am ount of VAT subject to set-off (reduction) within
each reporting period shall be calculated on the basis of the share of turnover (VAT exclusive) of
taxable transactions (operations, including those taxed at zero rate) in the total turnover (VAT
exclusive) of all transactions (operations) implemented in the same reporting period. (Deleted
sentences)
85.
In terms of transactions mentioned in clause 3 of article 7 of this law, no taxable turnover shall
rise and no recalculation of VAT amounts specified in tax invoices of suppliers of goods and
subject to crediting shall be done.
86
79 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. 80 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. 81 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 82 According to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. Initial text – “In cases defined in this clause
the amounts of VAT indicated in tax accounts (in case of import – in customs declarations) of suppliers shall be accounted to the financial results.” 83 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force fr om
01.01.2001. Initial text – “In cases of sales (provision) of goods produced or purchased on the territory of the Republic of Ar menia, as well as services at
a price lower than the cost price or the purchase price (incl uding the amount of the excise tax), the negative balance between the amounts of VAT
calculated (received) for the taxable turnove r and indicated in tax accounts of suppliers shall be accounted to the profit (income) of VAT payers and
shall not be set off or refunded.
In case of sales (provision) of goods imported into the territory of the Republic of Armenia at a price lower than the purchase price (including the
amount of the excise tax levied by Customs bodies) the negativ e balance between the amounts calculated (received) for the taxab le turnover and the
amounts of VAT charged (subject to charge) by Customs bodies of th e Republic of Armenia shall be set off in the part of the difference between the
amounts of the tax determined for the purchase price of goods by the method of calculation and the amounts of the tax charged (subject to charge) by
Customs bodies. The negative balance between the amounts of the ta x calculated in respect of the taxable turnover of the sales of goods and the amounts
of the tax determined for the purchase price of goods by the method of calculation shall be accounted to the profit (income) of the VAT payer and shall
not be subject to set-off or refund.
In case of the sales (provision) of goods at a price lower than the purchase price of goods, which are not subject to VAT at th e moment of import
pursuant to the procedure established by the Law, the amount of VAT determined for the purchase price of goods by the method of calculation shall be
taken as a basis for the calculation of VAT. The negative balance between the amounts of VAT calculated on the taxable turnover and determined by the
method of calculation shall be accounted to the profit (income) of the VAT payer (to the funds) of the purpose financing of non -profit public
organizations) (with amendments of 30.12.97.)”.
84 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. 85 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “By the end of each reporting period (with amendment of 28.12.98) of the fiscal year the recalculation of the amount of VAT
subject to set-off (reduction) and calculate d according to the above-mentioned procedure shall be performed. By the end of the fiscal year the final
calculation shall be performed, based on the ratios of taxable transactions (operations) determined by the annual results accor ding to the procedure
established by this Article, and all other transactions, provided it is possible to dis tinguish them directly or in other, more precise way. The respective
reference on the annual final calculation, pursuant to the procedure established in Subsection 3 of Section 6 of this Law, shal l be submitted to the Tax
inspectorate body together with the annual calculation report. Ta x Inspectorate bodies shall have the right to scrutinize the final calculation for the
verification thereof, pursuant to the established procedure, as well as in the case provided by the Article 25 of this Law – fo r the accuracy (reliability) of
the amounts of VAT subject to refund on the taxpayer’s application.”.
86 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001.
14

Article 28. In case when individuals, payers of VAT pursu ant to this Law, implement business activity
at the place of their residence para llel to the personal consumption, and have paid (registered) VAT for
the acquired goods and services, only the amounts of VAT paid (registered) for the goods and services
acquired directly for the purposes of the implementation of business activity shall be subject to offset
(reduction).

Article 29. 87 In case of violation of the requirements of article 19 and issuing tax invoices, the
entities shall be obliged to pay VAT amounts speci fied in tax invoices to budget according to the
general order defined.

SUBSECTION 3. PROCEDURE AND TERMS OF PAYING VAT AND SUBMITTING CALCULATIONS

Article 30. For the goods imported into the Republic of Ar menia, VAT shall be paid within 10 days
after the importation, in accordance w ith the procedure established by the Government of the Republic
of Armenia. In case when the previously declared customs regime (according to which VAT is not
levied on the goods passing the customs border) is replaced by the regime of issue (import) for free
circulation, the taxpayers (or other persons respons ible for the payments established by the customs
legislation) shall be obliged to pay the amounts of VAT not imposed in the customs regime of import
within 10 days after the re-declaration of goods or from the day when it became known.

Article 31. When VAT payers implement taxable transacti ons (operations), the moment of the rise of
delivery of goods and services, free (or with partial compensation) consumption, as well as related tax
liability (calculation of VAT), shall be the moment when one of the following cases occurs:
1. the goods are unloaded or delivered to the purchasers, or the services a
re rendered to the customers;
2. for the payers of VAT in accordance with the procedure indicated 88 in Article 24 of this Law –
the payment (taking into account the amount of the payment) is received from the purchasers
(customers) for the delivery of goods and provision of services;
3. the day of implementation of taxable trans actions (operations) on free (or with partial
compensation) consumption (including for the VAT payers, in accordance with Article 24 of t
his
Law).

Article 32. Payments of the amounts of VAT calculated in accordance with Articles 23 and 24 of
this Law shall be made into the state budget for each reporting period.
For the purposes of this Law, each quarter (wit h the exception of the case defined by the third
part of this Article) shall be considered as VAT reporting period.
For those persons whose revenues from operati ons defined in sections 1, 2, and 3 of article 6
exceeded 60 million drams in the p revious calendar year, the VAT reporting period shall be each
month.
89
The calculated VAT amounts shall be paid into the state budget up to the
20 th 90 day (inclusive)
of the month following the reporting period. 91
Deleted part. 92
87 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 88 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in
force from 31.12.1997. 89 Part 3 of Article 32 – with amendment according to RA Law “On Am endments and Additions to RA Law “On VAT”” in force from 01.01. 2002. 90 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 91 With amendment according to RA Law “On Ame ndments to RA Law “On VAT”” adopted by RA National Assembly on 28.12.1998, in force from
01.01.1999.
15

Article 33. VAT payers shall submit to the local tax inspectorate body the respective calculations of
the payments of VAT into the state budget in accordance with the form developed by the Tax
Inspectorate of the Republic of Armenia and with in the terms set by Article 32 of this law.
In case of identifying errors in terms of VAT by VAT payers themselves, adjustment forms may
be filed with corrected data by order defined except for the case defined in articl
e 29 of the
law.
93

SECTION 7. PECULIARITIES OF CALCULATION OF VAT

Article 34. Taxable turnover for the persons providing servi ces in the field of tourism (hereinafter –
agencies), which sell travel tickets (or render services) to citizens
on behalf of other persons, shall be
the difference between the whole amount paid by the t ourists to the agency and the value of services
rendered by other persons (particularly – the amount pa id for the registration of documents and for the
purposes of other similar expenses).
In cases when the delivery of goods and the provision of services related to the tourism is implemented
completely outside the territory of the Republic of Armenia, the zero tax rate shall be applied to the
services provided by the agencies in accordance with Article 16 of this Law, and in case when the
services are rendered both within the territory of th e Republic of Armenia and outside it, only the part
of services related to the transactions (operations ) implemented outside the Republic of Armenia shall
be subject to taxation.

Article 35. In case of a commission sale of the personal property of citizens and stateless persons in
accordance with the established procedure, the taxa ble turnover for persons implementing commercial
activity shall be the amount of a commission paym ent (commission fee), provided that the accounting
of the mentioned property is carried out separa tely from the accounting of new (non-commission)
goods, with observance of the rules of commission trade.

Article 36. In case of the auction sale of goods, the taxable turnover for the orga
nizer of the auction
shall be the amount of intermediary payment (bonus, interest, etc.) paid by the owner (or other person)
of the goods on sale, unless provided otherwise by this Law.

Article 37. Taxable turnover for the provision of communica tion services within the territory of the
Republic of Armenia shall be the price thereof, based on the established tariffs.
The amounts paid to the persons rendering communica tion services in the Republic of Armenia by the
member countries of the International Electroni c Net (IEN) according to the results of mutual
settlements in the line of international communicati on services between the Republic of Armenia and
other member countries of IEN, as well as the amounts paid to the persons rendering postal
services in the Republic of Armenia by the World Postal Union (WPU) according to the results
of mutual settlements in the line of postal s ervices between the Republic of Armenia and other
WPU member countries,
94 shall be considered as a compensation for the services exported, and the
zero rate of VAT shall be applied to them.

Article 38. With the exception of cases indicated in clau se 8 of Article 7 of this Law, the following
shall be considered as taxable turnover for collateral operations:
92 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in force from
01.01.2001. Initial text – “For the reporting year VAT shall be paid before Februa ry 25 (inclusive) of the year following the reporting year” (with
amendments of 30.12.98).
93 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001. 94 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.199 7, in
force from 31.12.1997.
16

1. in case of the sales of a collate ral composed on the goods currently in circulation (including the
pledge of real estate (mortgage) – the taxable turnover determined in accordance with the procedure
established by clause 1 of Article 8 of this Law;
2. in case of the sales of a collateral composed of the goods (in use) withdraw n from the circulation –
the difference between the prices of the sales (sal e) and the claims at full volume received at the
moment of their actual satisfaction, including in terest, compensation for the damage caused in
consequence of a delay in fulfilling the contractua l liability, penalty, fine, expenses on safe keeping
of the pledged property and fulfilling the claim provided with the pledge.
In cases specified in this Article the responsibility for calculation and payment of VAT shall
bear the pledger. 95

Article 39. Has become invalid 96

Article 40. 97 During liquidation of commercial organizatio ns, the sale of objects of property and
other property rights, including distributio n (sale) among shareholders, founders and
companions after covering liabilities towards the st ate and third parties, shall be subject to VAT
taxation by general order.
In case of termination of activities by individua l entrepreneurs, in terms of the balance of objects
of entrepreneurial activities (including goods, pr oducts, objects of mental property), additional
tax liability shall rise equal to VAT amounts credited before termination of activities and paid
for procurements in terms of other property rights.

SECTION 8. RESPONSIBILITY FOR THE VIOLATION
OF THIS LAW

Article 41. VAT payers and their officials shall bear re sponsibility for the violation of this Law in
accordance with the procedure established by the Law.

Article 42. For the violation of the procedure on filling in tax accounts defined by Article 20 of this
Law, a penalty amounting to 10% of VAT calculated in the documents in question shall be imposed on
the taxpayers.

Article 43. In case when the turnover subject to VAT is concealed or reduced, as well as when the
amounts of VAT subject to pay into the budget are concealed, or reduced because of making
reductions (set-off) of VAT amounts, paid for the goods and services with violation of the procedure
provided by this Law, the concealed or reduced am ount of VAT shall be exacted from the taxpayers,
together with a penalty equal to 50%
98 of that amount. This penalty shall be applied also for failure to
cover liabilities of tax defined in clause 4 of article 8 99 and in case when the inspection carried out
by the Tax Inspectorate bodies reveals that the am ount of VAT subject to pay to the budget is not
95 With amendment according to RA Law “On Amendments to RA Law “On VAT”” adopted by RA National Assembly on 28.12.1998, in force from
01.01.1999. 96 According to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. Initial text – “For the purposes of application
of the privilege indicated in clause 20 of Article 15 of this Law, persons implementing humanitarian assistance and benevolent programs shall make
relevant notes in the contracts concluded w ith suppliers located in the Republic of Armenia. In case when the revenue from the sales of goods supplied and
goods and services received (VAT exclusive) are not used for charter (program) purpos es, the qualification of the mentioned program (activity) as
humanitarian assistance and benevolence may be changed or suspended by the authorized body of the Government of the Republic of Armenia on
coordination of humanitarian assistance, which leads to the cessation or suspension of the mentioned privileges.”
97 With amendment according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.2000, in
force from 01.01.2001. 98 With amendment according to RA Law “On Amendments a nd Additions to RA Law “On VAT”” in force from 01.01.2002. 99 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001.
17

formed as a result of the fact that the amounts of VAT subject to set-off (reduction) exceed the
calculated amounts of VAT.

Article 43 1. In case if VAT amounts for supply or procured goods, rendered or provi
ded services
are not included in the information submitted to tax entities by order defined by article 20 of this
law, the person that has submitted informatio n shall be charged penalty by amount of 5,000
drams per piece of false information (tax account).
100
The VAT amounts completed in tax invoices for goods and services provided by suppliers not
declared in the information provided to tax offices as required by article 20 of this law are not
subject to crediting.
101
Article 44. Has become invalid 102

Article 44 1. In case of issuing tax invoices withou t transactions of provision of goods and
services, the persons are charged VAT amounts co mpleted on the tax invoices as well as penalty
equal to 100 % of the VAT amount, but not less th an 1 million drams. This punishment does not
apply if the persons carry the responsibility of completing the transaction based on goods or
service provision agreements.
103

Article 45. In case when persons implementing independe nt business activity were obliged but failed
to pay VAT while implementing taxable transactions (operations), pursuant to the provisions of Article
3 of this Law, they shall bear the responsibility established by the Law
.

Article 45 1. Interrelated entities shall be considered VAT payers regardless the fact of exceeding
the threshold specified in Article 3 of this Law. 104

SECTION 9. TRANSITIONAL AND FINAL PROVISIONS

Article 46. Instructions relating to the provisions of this Law, as well as the explanations to them shall
be approved by the Tax Inspectorate of the Republic of Armenia in coordination with the Ministry of
Finance of the Republic of Armenia, as well as:
– the explanations to the provisions of clauses 3 and 4 of Article 15 of this Law – with the Ministry of
Education and Science of the Republic of Armenia;
– the explanations to the provisions of clauses 5-7 of Article 15 of this Law – with the Ministry of
Agriculture of the Republic of Armenia, and with the Department of Standardization, Metrology and
Certification of the Republic of Armenia;
– the explanations to the provisions of clause 8 of Ar ticle 15 of this Law – with the Ministry of Social
Security of the Republic of Armenia;
– the explanations to the provisions of clause 13 of Article 15 of this Law – with the Ministry of
Communication of the Republic of Armenia;
– the explanations to the provisions of clause 18 of Article 15, and clause 10 of Article 16 (on
construction and related works) of this Law – with the Ministry of Urban Development of the Republic
of Armenia, and with the Departme nt of Statistics, State Register and Analysis of the Republic of
Armenia;
100 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001. 101 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” in force from 01.01.2002. 102 According to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.1997, in force from
31.12.1997. Initial text – “Penalty is charged in the amount of 20% of the amount of VAT allocated in the tax account for making out tax account in
cases indicated in Article 19 of this Law.”.
103 Article 44 1 – with addition according to RA Law “On Amendments a nd Additions to RA Law “On VAT”” in force from 01.01.2002. 104 With addition according to RA Law “On Amendments and Additions to RA Law “On VAT”” adopted by RA National Assembly on 26.12.200 0, in
force from 01.01.2001.
18

– the explanations to the provisions of clause 19 of Article 15 of this Law – with the Ministry of Health
of the Republic of Armenia.
The respective instruction on VAT, imposed by the cu stoms bodies of the Republic of Armenia while
importing goods into the territory of the Republic of Armenia, in the part of the provisions concerning
the calculation and payment of the tax, as well as th e explanations to them shall be approved by the
Customs Department of the Republic of Armenia in coordination with the Ministry of Finance of the
Republic of Armenia, and the Tax Inspectorate of the Republic of Armenia.

Article 47. In case when the norms, different from thos e provided by this Law, are established by the
agreements concluded on behalf of the Republic of Armenia, or by the ratified international
agreements, the norms of international agreements shall be applied.

Article 48. This Law shall enter into force from July 1,1997.
The Law of the Republic of Armenia “On VAT”, da ted June 30, 1993 shall be declared void from the
moment of the entry of this Law into force.
The clause 24 of Article 15 of this Law shall be valid up to December 31,1997 inclusive . 105
The clause 25 of Article 15 of this Law shall be valid up to December 31,1998 inclusive. 106
105 With addition according to RA Law “On Additions to RA Law “On VAT”” adopted by RA National Assembly on 30.09.1997, in force from
08.11.1997. 106 With addition according to RA Law “On Additions to RA Law “On VAT”” adopted by RA National Assembly on 30.09.1997, in force from
08.11.1997.
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