LAW OF THE REPUBLIC OF ARMENIA

of December 30, 1997 No. ZR-183

About the income tax

Accepted on December 27, 1997

Section I. General procedure for the taxation

Chapter 1. General provisions

Article 1. Subject of regulation of the Law

This Law governs the relations connected with determination and payment of the income tax in the Republic of Armenia determines circle of income tax payers in the Republic of Armenia, rates, procedure for calculation and payment of the income tax.

Article 2. Concept of the income tax

The income tax is the direct tax paid by taxpayers (in the cases established by the law by means of the tax agent) in the government budget according to the procedure and the sizes established by this Law.

Chapter 2. Taxpayers and taxation object

Article 3. Income tax payers

1. The income tax in the Republic of Armenia physical persons - residents of the Republic Armenia (further - resident) and physical persons - nonresidents pay/are taxpayers/.

2. In the context of this Law the physical person which was in the Republic of Armenia in complexity 183 days and more in any beginning or coming to the end tax year the twelve-monthly period (since January 1 December inclusive) is considered resident or the center of vital interests is not in the Republic of Armenia, and also, the physical person which is in public service in the Republic of Armenia, temporarily working outside the Republic of Armenia.

In the context of this Law the place where family or economic interests of person are concentrated is considered the center of vital interests. In particular it is considered that the center of vital interests of physical person is in the Republic of Armenia if there is house or the apartment where his family lives and there is his (families) personal or family main property or the family main place of implementation of its economic (professional) activity.

Article 4. Taxation object

The taxation object for resident the leviable income gained in the territory of the Republic of Armenia and beyond its limits is considered.

The taxation object for the nonresident the leviable income gained from the Armenian sources is considered.

Article 5. Leviable income

The leviable income is positive difference between the comprehensive income of the taxpayer and deductions performed according to provisions of this Law.

Chapter 3. Comprehensive income

Article 6. Comprehensive income

The comprehensive income is total amount of all income gained by the taxpayer in tax year irrespective of sources of their obtaining.

In the context of this Law the income, in particular, is considered:

a) compensation and other payments equated to it;

b) compensation acquired for use or right to use by any copyright of literary works. arts or sciences, any patent, the trademark, the project or model, the plan, confidential formula or process, the program for electronic computers and the database or for use or right to use by the industrial, commercial, scientific equipment, or provision of information on industrial, technical, organizational, commercial, scientific experience (daleeroyalta);

c) the percent and other compensation received on loans (further - percent);

d) dividends;

e) income (prizes) gained in gaming houses, in games with prizes;

e) ware prizes (prizes) of tenders and competitions, and also lotteries;

g) winnings (prizes) of tenders and competition, and also lotteries;

h) the property and money received according to the procedure of donation and the help;

i) the property and money received according to the procedure of inheritance;

j) insurance indemnities;

k) entrepreneurial income;

l) income from property acquisition;

m) payment and other compensation for lease (further - the rent), income gained from other civil agreements;

o) the insurance payments made for physical persons by the legal entities and the companies which do not have the status of the legal entity, the payments of obligatory social security except for established by the law.

Income gained in natural (non-cash) form (including in case of deduction (collection) by the tax agent of tax according to provisions of this Law), is considered in comprehensive income at the state fixed (regulated) prices, and in case of their absence - at the free (market) prices according to the procedure, established by the Government of the Republic of Armenia.

Income gained by physical persons in foreign currency is recalculated in dramas of the Republic of Armenia proceeding from the average exchange rate published by the Central bank of the Republic of Armenia created in the foreign exchange markets on the date of their obtaining.

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