Heavy Fines for Converting Electric Vehicles into Spare Parts

The government plans to tighten the control over the importation of electric vehicles and eliminate cases of their dismantling for spare parts.

According to Article 64, Part 2, Point 58 of the Tax Code of the Republic of Armenia, the importation and/or transfer of certain categories of electric vehicles is exempt from value-added tax (VAT) until January 1, 2026. This has made the importation of such vehicles more profitable.

However, according to the government's assessment, some importers are taking advantage of the exemption not to operate the vehicles but to dismantle them and sell spare parts, avoiding relevant taxes. This creates unfair competitive conditions for businesses.

The draft proposes amendments to the Code on Administrative Offenses by introducing new fines for violations: if an imported electric vehicle is not registered within the established period and ownership is not formalized, a fine is proposed amounting to one thousand times the minimum wage. If an imported electric vehicle is de-registered within a year (except in cases where there is a certificate from the Ministry of Internal Affairs regarding an accident), the importer will be fined an amount equal to one thousand times the minimum wage.

By adopting the draft, the government aims to prevent fraudulent schemes in vehicle importation, where vehicles are not registered in the country and instead are dismantled for spare parts, promote compliance with legal obligations, and ensure fair competition in the auto parts market, thereby increasing state revenues by preventing tax evasion.

The draft amendments were developed by the Ministry of Economy of Armenia.