The SRS Uncovers Cases of Aggressive Tax Planning

The State Revenue Committee (SRS) investigative and operational intelligence department has uncovered a case of aggressive tax planning as part of its efforts to combat tax violations and economic crimes. According to information from the SRS press service, a resident individual entrepreneur imported a significant quantity of fruits and vegetables into the Republic of Armenia without issuing the necessary accompanying documents.

Operational data indicates that the individual entrepreneur supplied these goods to predetermined buyers without recording the relevant tax invoices. In response to the gathered intelligence, the department's employees conducted necessary operational and intelligence actions to ensure oversight over the mandatory documentation requirements for goods supplied in the business sector.

As a result, it was revealed that in 2020, the individual entrepreneur imported approximately 1,500 tons of fruits and vegetables from Georgia and, without issuing tax invoices, supplied them entirely to various entities dealing in agricultural products within Armenia. It was also found that the entrepreneur aimed to “clean” around 1,500 tons of goods by externally fitting a structure located at 19/9 Bagratashen village in Tavush region as a commercial facility. They formally adjusted it to meet the requirements for retail sales space, registered a cash register, and without conducting any sales from the specified address, recorded around 97 million AMD in income while printing false receipts that did not correspond to reality.

As a result of the recorded violation, an administrative case has been initiated against the individual entrepreneur, leading to an additional tax obligation of approximately 48.5 million AMD.

The SRS investigative and operational intelligence department urges business entities to strictly adhere to the mandatory requirements of the Tax Code regarding the documentation of goods supplied or transported, and to issue accounting documents in the name of the purchasing entities. They also highlight the importance of avoiding the creation of shadow phenomena through these entities and encourage refraining from the harmful practice of “cleaning” inventory through false cash register receipts.