Indirect taxes
Over the last decade, VAT has been a major tax in Armenia in terms of the contribution it makes to state revenue. Taxpayers have also traditionally viewed the law surrounding VAT to be considerably complicated, and VAT as being one of the most difficult taxes to administer. Although from an economic point of view VAT is borne by consumers, each taxpayer involved in the supply chain must report and pay VAT to the budget.
Historically, the Armenian tax authorities have paid significant attention to VAT issues during audits.
For most taxpayers, key VAT considerations include:
- Compliance with extensive documentation requirements
- Cash flow costs and opportunities related to the application of VAT to a taxpayer’s activities
- VAT costs and impact on pricing.
Excise tax represents a major cost for companies involved in activities subject to this tax (alcohol, tobacco, oil products, etc.) The administrative regulation of the turnover of excisable goods also has a major impact on taxpayers’ operations.
Our services
- VAT refunds
- VAT on cross-border services
- Application of VAT exemptions
- Application of the reduced VAT rate
- Analysis of input VAT and cash flow costs
- Advice on excise tax
- Advice on non-Armenian VAT issues
VAT refunds
We provide assistance in obtaining VAT refunds. This includes developing an approach on the timing of claiming refunds and undertaking other steps prescribed by the VAT refund procedure, assessing the quality of documentary support related to the refunded amount, and preparing for and assisting during tax audits. PwC also assists with the compliance terms for the formal VAT refund procedure, including submitting applications for VAT refunds and subsequent follow up.
VAT on cross-border services
Certain services provided to foreign clients are not subject to VAT.
We analyse the nature of the provided services in order to assess whether there is a basis not to apply VAT. At the next stage, we assist in drawing up the documents between the parties which will enable the non-VATable treatment to be applied.
Application of VAT exemptions
The law establishes a number of VAT exemptions (warranty repairs, banking services, , etc). We provide advice and other assistance related to the application of such exemptions, including an analysis of the applicable requirements, documentary support, etc.
Application of the reduced VAT rate
We support to analyse the classification of services, provide recommendations aimed at taking advantage of the reduced VAT rate and assist with any related implementation issues.
Analysis of input VAT and cash flow costs
If a taxpayer is involved in activities that are not subject to VAT, generally input VAT on the respective costs should be expensed.
We provide recommendations on compliance with input VAT related regulations, analyse the impact of input VAT on the company’s costs, and, where appropriate, assist in structuring VAT exempt activities in a cost efficient way.
Similarly, we analyse the cash flow implications of the VAT application on the company’s activities and provide recommendations on improvements.
Advice on excise tax
We provide advice on excise tax law. This is usually related to compliance with applicable law requirements, issues surrounding the classification of products, and administrative procedures related to the turnover of excisable goods.
Advice on non-Armenian VAT issues
With the involvement of PwC network member firms in other countries, we can assist Armenian companies that have activities outside Armenia to deal with non-Armenian VAT issues. These often relate to VAT refunds, registration, etc.
Contact us
