Services Transitioning from Turnover Tax to VAT System

Starting July 1, certain services will transition from the turnover tax to the VAT system.

According to the amendments made to the Armenian Tax Code, as of July 1 of this year, certain professionals and service providers will no longer be able to operate under the turnover tax and can only work within the general taxation system.

This change pertains to activities classified under the economic activities classification used in Armenia: specifically, those included in section “M (EM) Professional, Scientific and Technical Activities,” which encompasses “69. Legal and Accounting Activities” and “70. Activities of Head Offices; Management Consultancy Activities.” Additionally, it affects activities under section “N (EN) Administrative and Support Activities,” which includes “78.2. Activities of Employment Placement Agencies” and “78.3. Other Activities of Employment Placement Agencies.”

In order to register as a VAT payer in the electronic reporting system, taxpayers engaged in the aforementioned activities are encouraged to submit a declaration regarding their registration as a VAT payer through the electronic reporting system by July 21 of this year.