BILLS IN PARLIAMENT

 

Some Features Pertaining to the Calculation of Depreciation Shall be Determined at the Discretion of the Resident Profit Taxpayer

On 22.04.2020, the National Assembly passed the first reading of a bill which envisages the following: the minimum depreciation period of fixed assets imported or acquired by the entities by December 31, 2020, or the share of depreciation deductions by years shall be determined at the discretion of the resident taxpayer, but not less than one year, through the annual report.

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GOVERNMENT DECREES

 

The Fourteenth Package of Measures to Neutralize the Economic Consequences of Coronavirus

As part of the fourteenth package of measures adopted by the government, assistance will be provided to institutions of higher education and postgraduate students (also, clinical residency students). Assistance will be provided in the following ways:

• if the criteria set by the decision are met, the student's tuition fee will be partially or fully paid by the state;
• if students meet the criteria set by the decision, they will be included in the list of beneficiaries of the program subsidized by the state (by decision N 270-N of March 14, 2013) of the program of educational loans (subsidizing the interest rate of loans).

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Amendments to the Labor Code

The government proposes to make some amendments to and additions to the Labor Code. The proposed changes and additions mainly concern the regulation of labour relations in the conditions of natural disasters, technological accidents, epidemics, accidents, fires and other emergencies. In particular, it is put forward:

• If the state or local bodies receive information about complaints or violations from individuals during the period of prevention of the situations mentioned above or immediate elimination of their consequences, the authorized inspection body will be authorized to control over the performance by employers of the requirements of labour legislation, other normative legal acts containing the labor law
• If it is not possible to work remotely, the employee will be given the opportunity to take their annual leave
• If an employee does not show up for work or shows up for a part-time job during the period of prevention of the situations mentioned above or immediate elimination of their consequences, pay for the work will at least be in accordance with the actual time worked or actual work performed.

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Restrictions on Enforcement

During the state of emergency, the power of the Armenian Enforcement Service to seize debtors’ property within enforcement proceedings is limited if it is initiated after April 14, 2020, on the bases of administrative acts adopted by local self-government bodies for non-payment of local fees for paid parking in communities. It is also limited to seize funds provided to individuals and legal entities after March 16, 2020, within the framework of measures established by the Armenian government to neutralize the consequences of coronavirus.

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Amendments and Additions to the Commandant's Office Decision No. 27 Of March 31, 2020

The new decision of the commandant's office made amendments and additions to the regulation of temporary restrictions on the right to free movement and economic activities throughout the territory of Armenia in connection with the legal regime of the state of emergency. In particular, restrictions on inter-regional movement have been lifted and checkpoints have been cancelled. Temporary restrictions on certain types of economic activity have also been lifted. For the production of clothing, shoes, electrical equipment, furniture and activities of sports clubs, as well as in other individual cases, an exception to the restrictions may be considered. An exception request can be submitted online via https://covid19.gov.am/hy.

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CHANGES IN THE FINANCIAL SPHERE

 

New Thresholds for Compensation of Bank Deposits Made by Individuals

Within the framework of the legislative initiative submitted by one of the fractions of National Assembly, it is proposed, that the maximum threshold of compensation of bank deposits made by individuals in case of insolvency of a bank may increase and become AMD 16 million for dram deposits and AMD 7 million for foreign currency deposits. The threshold is currently AMD 10 million for dram deposits and AMD 5 million for foreign currency deposits. The draft law on relevant amendments to the Law of the Republic of Armenia on Guaranteeing Compensation of Bank Deposits of Natural Persons has not yet been included in the agenda of the National Assembly.

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TAX LEGISLATION

 

Change of Amount of Penalties Paid by Taxpayers

In case of the delay in payment of taxes past the established deadlines, the amount of the fine paid by the taxpayer in the amount of 0.075% for each overdue day is replaced by the amount of 0.04%. The draft amendments to the law were fully adopted by the National Assembly during its second reading.

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New Amount for Seizing Taxpayers’ Property

From now on, the basis for seizing taxpayers’ property will be 1.5 M. drams or more of the amount of the unfulfilled tax liability (instead of the previous 500 thousand drams or more). The goal of this project is to raise the threshold for unpaid obligations since business entities have financial difficulties related to COVID-19. The draft amendments to the law were fully adopted.

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Postponing the Tax Payment Deadline (Tax Holiday)

As part of the legislative initiative submitted by one of the National Assembly's factions, It is proposed, to grant a deferred payment of turnover taxes (tax holiday), but not for more than six months, for the following actions:

• catering (public food),
• travel agencies, tour operators, reservation and other tourism services, hotels and guesthouses,
• culture, entertainment and leisure,
• hairdressing salons and beauty salons.

The draft amendments to the law have not yet been included in the agenda of the National Assembly.

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Amendments in Financial Leasing and Regulations Arising From it

The project proposes:

1. to define and clarify the legal relations of all parties involved in the leasing process, the legal basis of contracts, types of leasing, the correct definition of residual values;
2. to provide a unified approach for all participants in the process, in particular on the accounting methodology of both the Leassee and the Leasser, and the Supplier Company;
3. 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 leasser: it will contribute the growth of community income, etc.

The draft amendments to the law are included in the agenda of the National Assembly.

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