The aim of the new legislative regulations is to create a favorable tax environment for the gold concentrate, further processing of the alloy, including refining, in the Republic of Armenia. The executive body proposes amendment and addendum to the Tax Code.
Presenting the current regulations, the RA Deputy Minister of Finance Arman Poghosyan noted that the alienation of the gold concentrate, as well as the alloyed gold, is exempt from value added tax (VAT). In other words, the regulations of the Tax Code are applicable to that transaction: VAT debit amounts attributable to the exempted transaction as VAT amounts paid to suppliers are not subject to offset and must be added to the cost of those goods in the defined order. On the other hand, according to the current legislation, there is a possibility to export that concentrate or alloy from Armenia.
According to Arman Poghosyan, there is an unequal environment between two models: it is economically more advantageous to arrange the refining of the alloy abroad.
“The alienation of the alloy continues to be considered a VAT-exempt transaction, but it is possible to set off the VAT paid in the previous circles and, accordingly, to equalize the tax environment to the same situation that the entities have, if they have chosen to export the alloy, organize refining abroad and the way to import the ready-made gold,” the Deputy Minister underscored, introducing the new regulation. He also clarified that gold jewelry will be taxed with VAT.
Narek Ghahramanyan presented the endorsement of the NA Standing Committee on Economic Affairs. Narek Ghahramanyan informed in response to Gevorg Papoyan’s question that the members of the Head Committee visited Yerevan jewelry plant, got acquainted with modern equipment and made sure that the factory is ready to organize the entire chain. The Deputy Minister Arman Poghosyan also assured that the matter has been studied, and there are sufficient capacities of quality and volume to organize the process of refining the gold alloy without interruption.