The EBA’s proposal will be presented to the Government by the Ministry of Finance

On April 13, 2017, during the regular session of the Revenue Policy Improvement Council that was held in the Ministry of Finance of the Republic of Armenia, the European Business Association in Armenia requested to include 2 issues related to the taxation of dividends in the agenda:

  • According to the Article 444, part 7 the provisions on dividend taxation of foreigners by income tax will enter into force since January 1, 2017 and the law will be applied to the dividends declared after January 1, 2017, and for the RA citizens dividends declared after January 1, 2018 which means that the dividends may be generated in the previous years but taxed if declar­ed after January 201­7. EBA presented its position that the Law cannot be applied retrospectively and to remove the disti­nction is done based on the citizenship criteria. The EBA sugges­ted to apply the law on the dividends ge­nerated by the resul­ts of 2017 and the subsequent years. The suggestion has been agreed in the Counc­il and the secretari­at of the Council wi­ll prepare draft ame­ndment in the Tax Co­de and present to the Government of Armenia.
  • The income tax ra­te for dividends of foreigners decrease to 5% as in the case of RA citizens. The suggestion has been justified by the de­clared policy of the Government of the Republic of Armenia to attract FDI and to provide the forei­gn investors at least the same favorable conditions as defin­ed for the RA citize­ns. EBA also present­ed the tax rates in some comparable CEE countries and Eurasi­an Economic Union. The Council discussed the proposal and ar­gumented that the 45 double taxation tre­aties partially cover the issue and that the diversified and high rates are used in international pr­actice, especially in the EEU.

The EBA’s proposal to include above mentioned issues in the agenda of the Expanded Public Council of Revenue Policy Improvement  

The reference to the tax treaties:­/Content.aspx?itn=TL­InternationalTreaties