SCC Unveils Case of Tax Evasion Exceeding 500 Million AMD

The Republic of Armenia’s State Revenue Committee (SCC) continues its uncompromising fight against tax violations in the construction sector. A group of individuals has been uncovered for failing to pay taxes of especially large amounts, amounting to approximately 500 million AMD.

Operational information was received by the SCC’s Investigation and Operational Intelligence Department that a physical person, A.H., acting as the actual beneficiary, had carried out construction and sale of apartments under the name of another physical person, N.A., at specific addresses on Azatutyun Avenue in Yerevan. In agreement, during the actual sale of apartments, contracts for the alienation of shared ownership were mainly signed. This created conditions for distorted data to be entered into the annual calculation of income tax and social contributions, allowing particularly large taxes to go unpaid through the concealment of taxable objects.

Furthermore, it was reported that these individuals, violating the legislative requirements regarding cash transactions and transactions in Armenian drams, received advance payments for apartment purchases in cash and foreign currency. Necessary operational-intelligence measures, aimed at verifying the received operational information and uncovering violations of legal acts entrusting tax authorities with supervision, confirmed that the aforementioned individuals were to receive 200,000 USD in advance cash and foreign currency from a potential buyer for the apartment purchase, later finalizing the sale as a shared ownership transaction.

On November 13 of this year, after the alleged buyer paid the money in cash and foreign currency for the apartment purchase, A.H. and N.A. were arrested based on the existence of reasonable suspicion of having committed an offense. The suspects were subjected to personal searches.

Given that a particularly large tax evasion case of approximately 500 million AMD was revealed, a report was submitted to the Republic of Armenia’s Investigative Committee’s Main Department for Economic Crimes and Smuggling Investigations in accordance with the relevant article of the criminal code, along with the prepared documents. The arrested individuals were also transferred there.

Hours after the discovery of this crime, a yearly calculation of income tax and social contributions was submitted to the tax authority under the name of developer N.A., generating tax liabilities of about 500 million AMD and resulting in the payment of approximately 250 million AMD.

The SCC’s Investigation and Operational Intelligence Department calls on those involved in construction and purchasers to accurately state the real values in contracts during property purchases and to receive payments in Armenian drams and cashless transactions. The SCC will continue to use all its tools to uncover similar detrimental phenomena, nullify such transactions, and hold offenders accountable.

Note: A person accused of a crime is considered innocent until proven guilty in accordance with the procedures established by the Criminal Procedure Code of the Republic of Armenia with a legally binding court decision.