Winnings Exceeding 5 Million Drams in Armenia to Be Considered 'Large Winnings' and Taxed at 10 Percent

In Armenia, game organizers will have to pay a 10 percent income tax to the state budget for winnings exceeding 5 million drams. According to Armenpress, Rustam Badasyan, the head of the State Revenue Committee, presented the draft laws on the regulation of gaming activities during the second reading at a meeting of the National Assembly's Economic Affairs Committee.

The concept of 'large winnings' has been established, defined as winnings that exceed 5 million drams. It is proposed that a 10 percent income tax be imposed on these winnings. The head of the SRC noted that the gaming sector is already regulated and operates within an appropriate taxation framework. 'With this draft, we regulate the taxation of the winnings themselves, which, under the current Tax Code, are considered reduced income and are not taxed,' Badasyan stated.

It is suggested that the organizer of the gambling game withhold the income tax from the winnings and transfer it to the state budget. As for all other winnings, a methodology for annual calculations will be in place. 'This means that if there is a positive difference between all the bets placed during the year and the winnings received, we suggest that individuals report this positive difference in their annual declarations and pay a 5 percent income tax on it to the state budget,' the head of the SRC explained.

Babken Tunyan summarized that large winnings will be taxed at 10 percent, and the tax agent will be the respective company. 'Small winnings that occur during the year will have their net winnings calculated by the appropriate authority and will be taxed at 5 percent. The payment will be made by the citizen when submitting their income declaration,' he added.

Until the proposed regulation comes into force, other regulations will also take effect. Telecommunications companies operating in Armenia must block the operation of unlicensed gambling sites in the country, meaning access to those sites will be impossible. Commercial banks must also block any payments to unlicensed gaming operators in Armenia.

The draft received a positive conclusion and will be discussed in the National Assembly's plenary session.