A Number of Companies Avoided Paying Taxes Amounting to 501 Million AMD; 5 Individuals Arrested

The Investigative Committee of Armenia’s main department for economic crimes and smuggling has uncovered evidence during the pre-trial investigation of a criminal case regarding the failure of the "Nor Zovk" LLC to pay substantial taxes. According to the findings, during the years 2021-2023, A.G. managed the activities of five LLCs and one individual entrepreneur operating in retail trade of food and economic goods in the cities of Ijevan and Dilijan in the Tavush region. He conspired with H.G., L.A., S.H., accountants N.M. and M.A. to hide the tax bases of these companies and the individual entrepreneur to avoid paying taxes totaling 501,701,858 AMD by entering distorted information in their tax calculations.

As reported by the Investigative Committee, to execute their criminal intent and hide income from the shops while maintaining control over the actual turnover, from March 17, 2021, to February 20, 2023, A.G. involved V.S., the owner of the software company "Aktraid-Soft". V.S. installed the "1C" commercial software in the stores of these companies and the individual entrepreneur, which was connected to a concealed electronic server system in his basement.

The deployment of the "1C" commercial software and the electronic server system allowed data regarding the actual turnover of the five LLCs and one individual entrepreneur to be accumulated in the electronic server system, leading to the concealment of part of the sales made by these taxpayers from the tax body. The same server system also revealed data regarding concealed turnover by the "Nor Zovk" LLC.

In this manner, A.G., with the assistance of V.S. using the aforementioned software, in collaboration with H.G., L.A., S.H., N.M., and M.A., violating several provisions of the RA Tax Code, concealed the actual turnover of the mentioned businesses and engaged in tax evasion amounting to 501,701,858 AMD, by introducing distorted data into the tax calculations of the companies and the individual entrepreneur.

Based on sufficient evidence obtained in the criminal proceedings, the investigating body submitted motions to the supervising prosecutor to initiate public criminal prosecution against A.G. and the aforementioned five individuals under part 3 of Article 290 of the RA Criminal Code, which were accepted, and they were charged. A.G. and four other defendants were placed under detention, while one was prohibited from leaving the country. The pre-trial investigation is ongoing.