Construction Company Fails to Pay 66.3 Million AMD in Taxes, Director Charged

The Office of the General Prosecutor of Armenia has released a statement noting that N.N., the director of "EL-AN" Limited Liability Company, has been charged with failing to pay taxes in a particularly large amount, by submitting clearly false data in the tax declarations presented to the tax authorities. As a result, the state budget was deprived of 66 million 30 thousand 178 AMD in taxes.

During the preliminary investigation, it was revealed that N.N. had declared the values of seven apartments in a residential building at 2/9 Kievyan Street, built by the construction company and sold between May 2018 and April 2019, to be less than their actual values, while inflating the expenses incurred by the company.

The deductible expenses from the company’s gross income for the years 2018 and 2019 amounted to 74 million 818 thousand 704 AMD and 205 thousand 694 AMD, respectively. However, N.N. reported the deductible expenses in the calculations for the profit tax for 2018 as 131 million 30 thousand 745 AMD and for 2019 as 99 million 845 thousand 150 AMD.

As a result, by violating several articles of the Tax Code of Armenia, N.N. understated the taxable profit of the Company during the specified period, failing to pay 26 million 523 thousand 352 AMD to the state budget in 2018, and 22 million 76 thousand 886 AMD in 2019. For the months of May, August, October, November, and December of 2018, as well as April 2019, N.N. did not calculate and failed to pay 17 million 429 thousand 940 AMD in value-added tax.

Considering the aforementioned circumstances, on June 27, 2022, a charge was filed against N.N. under part 2 of Article 205 of the Criminal Code of Armenia (maliciously evading payment of taxes, fees, or mandatory payments, committed in particularly large amounts). A measure of restraint has been chosen in the form of a travel restriction. Necessary investigative actions are being conducted under prosecutorial supervision, including a forensic accounting examination being appointed.