Weekly Client Alert # 10

Download

BILLS IN PARLIAMENT

 

Amendments to VAT Payment for Goods and Medicine

It is proposed to postpone the payment of VAT on food and medicine imported from third countries through the customs regime "Release for Domestic Consumption" until the sale of those goods, taking into account the large sales of the given goods. The proposed amendment is expected to be in effect until December 31, 2021. The draft amendment to the law is not included in the Parliament agenda yet.

Find more here

 

Amendments in Financial Leasing and Regulations Flowing from It

The project proposes:

  • to define and clarify the legal relations between all the parties involved in the leasing process, the legal basis of contracts, types of leasing, the precise determination of the residual values;
  • to provide a unified approach for all participants in the process, in particular the accounting methodology for both the Leassee and the Leassor, and the Supplier Company;
  • property tax and administrative fines for vehicles that are subject to leasing will be paid at the place of registration of the Leassee, and not the Leassor, which may contribute to the growth of community income.

The draft amendment to the law was adopted in the first reading.

Find more here

 

The Franchise of The Protected Objects of Intellectual Property Shall be Registered With the Authorized State Body

From now on, in case of franchising of protected objects of intellectual property, the right shall be registered and terminated by the authorized body (Intellectual Property Agency). The bill was fully adopted in the second reading.

Find more here

 

GOVERNMENT DECREES

 

Changes in The Program for Subsidizing Interest Rates on Loans Provided to the Agricultural Sector

Some amendments were made in the terms of providing of loans by the Government's decision " On approval of the program for subsidizing interest rates on loans provided to the agricultural sector”. From now on, loans will be issued at the actual rate of up to 14%, and in the case of a loan of up to 1 million AMD in the rate up to 13%.

At the same time, other payments for services of financial institutions related to the loan cash-out fees, service fees, commissions, etc., will not be charged.

Find more here

 

FINANCIAL SPHERE

 

Widening the Scope of Persons Eligible to Apply to the Financial System Mediator

Hereinafter not only individuals but also organizations and sole entrepreneurs falling into the scope of the micro-business shall be entitled to apply to the Financial System Mediator. The Draft Law presented by the parliamentary fraction “Bright Armenia” on Making Changes and Amendments to the Law of the Republic of Armenia on Financial System Mediator was introduced for second reading in the Session of National Assembly held on May 5.

Find more here

 

Changes of the Institute of Leasing

The legal institute of leasing may be subjected to essential changes, the main of which is intended to be the introduction of the concepts reverse leasing and secondary leasing into the law.

In particular, reverse leasing implies transfer for temporary use and control of the lessee of a property obtained from him, and secondary leasing is the re-transfer to another lessee of the leased item returned to the lessor in the result of termination or preliminary termination of a leasing agreement.

The legislative package introduced by the Government passed first reading at the session of the National Assembly held on May 6.

Find more here, here, here, here, here, and here

 

 

PUBLIC SERVICES REGULATORY COMMISSION

 

The New Methodology for Calculation of Regulatory Tariffs in the Gas-Supply System

Before May 20, 2020, the Public Services Regulatory Commission of Armenia will be discussing a draft decision, which envisages the introduction of stimulating tariff regulations in the gas-supply system, creating conditions for the implementation of the necessary investments in the system.

In particular, the draft stipulates a 10-year period for gas-supply companies starting from 2020, which is divided into 2 five-year periods. During the five-year period, the operating and maintenance costs of the company will not be reviewed annually (only material and repair costs will be adjusted against the inflation), the permissible amount of losses, setting targets at the end of each period, as well as fixing the required investment. This approach may encourage companies to optimize costs and reduce losses as quickly as possible during each 5-year period while reaping additional benefits, and at the end of the 5-year period, the improved tariffs will be taken into account in the following year, having a positive impact on the natural gas tariffs sold to consumers. Find more here