Article 1. This Law defines the concepts of taxes in the Republic of Armenia and their types, the objects of taxation and taxpayers, the order of the settlement of controversies, responsibility for the violation of the tax legislation, as well as the main principles upon which the legislation of the Republic of Armenia on taxes are based /Amendments of July 19, 1996, effective from July 19,1996/.

Article 2. The tax is an obligatory for everybody and without compensation payment defined by this Law and by other acts of the legislation of the Republic of Armenia of consistent amounts and of predetermined terms, levied from individuals and legal persons and other taxpayers, for state and public needs. /Amendments of July 19, 1996, effective from July 19,1996/.

Article 3. Taxes defined by this Law are paid to the state budget of the Republic of Armenia, local budgets, and in cases defined by the Law, extra-budgetary funds /Amendments of July 19, 1996, effective from July 19,1996/.

Article 4. In the Republic of Armenia a unified tax system which is based on the principle of identical and uniform taxation of all taxpayers operates.

In the Republic of Armenia all individuals and legal persons, and all enterprises and organizations that do not have the status of a legal person, are obliged to pay taxes if otherwise is not defined by the legislation of the Republic of Armenia /Amendments of July 19, 1996, effective from July 19,1996/.

Article 5. The following tax privileges can be established by the legislation of the Republic of Armenia:

- tax exemption;
- reduction of the object of taxation;
- reduction of the tax;
- term privileges of tax calculation and payment;
- reduction of tax rate;
- compensations to the taxpayer.

In cases when a decision about the termination or alteration of effective tax privilege is adopted then the order of implementation of this decision is established necessarily for the taxpayers who are under effective tax privilege.

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The Government of the Republic of Armenia, by consent of the Permanent Commission on Economy, Finance and Budget of the National Assembly of the Republic of Armenia in case defined by the laws on separate types of taxes, can establish rates and limits of fixed payments, the order of their calculation and payment, as well as tax privileges for individual payers and group of payers /Amendments of June 6, 1992 and April 18, 1993/. All the decisions of the Government of the Republic of Armenia concerning mentioned issues are published in the official press of the Republic of Armenia and in the "Bulletin of the Supreme Council of the Republic of Armenia" /Amendments of April 18, 1993/.

Local taxes can be established by proposals of the local deputy councils, and they can be collected from the local population only for certain social-economic needs and only in case of a positive result from a referendum conducted within the local administrative unit. Local taxes can be established for a period no longer than 5 years. These taxes can be terminated before that time by the decision of the local deputy councils /Amendments of July 19, 1996, effective from July 19,1996/.

Local taxes can be terminated by the Supreme Council of the Republic of Armenia if they contradict the legislation of the Republic of Armenia.

Article 7. The order of the calculation and payment of taxes is established by the Government of the Republic of Armenia according to the presentation of the Ministry of Finance and of the State Tax Inspectorate /Amendments of July 19, 1996, effective from July 19,1996/.

Article 8. If any rate of the defined tax is changed, and if the financial year includes the date of the rate change (if this date is not the first day of the financial year), then the taxes are calculated according to the former rate until the actual date of the change, and are calculated by the new rate after the actual change date until the end of the year.

If any tax is terminated, then for the year the tax termination is considered as a tax change and the new tax rate is equal to 0.

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Article 10. The taxes are paid by money that are in official circulation in the Republic of Armenia, as well as in foreign currency Foreign currency sums are recalculated into official money of the Republic of Armenia proceeding from the currency course of the day of payment as established by the Central Bank of the Republic of Armenia /Amendments of December 30, 1992, effective from January 1, 1993; and in the part of the excluding of the words "and duties" and "and duty stamps" - amendments of July 19, 1996, effective from July 19,1996 /.

Article 11. The amount of income (profit) of taxpayers of the Republic of Armenia received out of the Republic of Armenia are included in the total amount of income (profit) taxable in the Republic of Armenia and taken into account at the calculation of the amount of taxes.

Taxes levied in the Republic of Armenia are reduced in accordance with the tax amounts levied from the taxpayers of the Republic of Armenia in foreign countries according to the legislation of those foreign countries. Thereby, the reduced amounts can not exceed the tax amount, payable in the Republic of Armenia from the income (profit) received in foreign countries.

Article 12. The following taxes are defined in the Republic of Armenia /Amendments of July 19, 1996, effective from July 19,1996/:

-profit tax - from profit of legal persons;
-income tax - from income of individuals;
-excise tax - from the selling of certain goods;
-value added tax - from turnover of goods and services;
-social tax - from wages and the income equated with wages;
-land tax - from the land owner;
-professional tax - for the performing of certain professional activities;
-property tax - on certain types of property;
-nature protection tax - for the use of natural resources and for the pollution of the environment;
-highway-user tax - for the selling of petrol and diesel fuel and for transportation means according to their power,
-custom duties - for export and import of goods;
-local taxes - according to part 2 of the Article 6 of this Law;
- other taxes /Amendments of July 19, 1996, effective from July 19,1996/.

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1.property taxes (land tax, property tax, highway-user tax) /Amendments of July 19, 1996, effective from July 19,1996/;

2.other taxes, after reduction of the taxable object at amount of taxes mentioned in the point 1 of this Article.

Article 14. Taxpayer has the right:

- to get acquainted with the acts of examination of his activity;
- to submit needed explanations to the state tax inspection bodies about calculations of taxes, and about payments, according to the results of examinations /Amendments of July 19, 1996, effective from July 19,1996/;
- to appeal the actions of officials of the state tax inspection bodies according to the legislation of the Republic of Armenia.

Article 15. Taxpayer is obliged:

- to carry out an accounting according to the established form, file reports on the financial-economic activity, calculate the amounts of the established taxes for the relevant report period, submit documents and information established by the legislation about calculation and payment of taxes to the state tax inspection bodies of the Republic of Armenia /Amendments of July 19, 1996, effective from July 19,1996/;

- to pay taxes established by the Law promptly and fully /Amendments of July 19, 1996, effective from July 19,1996/;

- to submit documents confirming the right of tax privileges;

- to correct accounting in case when examinations show taxable object completely or partially concealed from the state tax inspection bodies;

- to produce written explanations of the reasons for not signing acts of the examination in case of a disagreement with descriptions in the examination by the state tax inspection bodies.

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The tax obligation of a legal person and the tax obligation of enterprises and organizations that does not have the status of legal person ends in case of the fulfillment of this obligation or of a tax elimination. In case of an impossibility of the fulfillment of the tax obligation, the state tax inspection body has the right to bring up a bankruptcy suit against the taxpayer. In case of the liquidation of a legal person, and enterprises, organizations that does not have the status of legal person, the tax debt is transferred to his, the succerssor`s or the owner's property /Amendments of June 6, 1992/.

The levying of unpaid amounts of taxes as well as defined by the legislation of the Republic of Armenia penalties and fines for unpaid taxes, is made in indisputable order from legal persons and in legal order from individuals and other taxpayers /Amendments of July 19, 1996, effective from July 19,1996/.

Article 17. The control over the calculation and payment of taxes is exercised by the state tax inspection bodies of the Republic of Armenia, and in case defined by the legislation of the Republic of Armenia, by the custom bodies of the Republic of Armenia /Amendments of April 18, 1993; and in the part of the excluding of the words "and duties" - amendments of July 19, 1996, effective from July 19,1996/.

Article 18. While exercising control over tax calculation and levying information and testimony received illegally cannot be used against the taxpayer for tax calculation and levying.

Article 19. Testimony or information cannot be used for the calculation and levying of tax from a taxpayer until the taxpayer has received it and has provided explanations.

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In case when the necessary information is not produced, the top management of these institutions, organizations and enterprises bear responsibility, according to the legislation of the Republic of Armenia.

Article 21. Taxpayers bear responsibility for the violation of the tax legislation according to the legislation of the Republic of Armenia.

Article 22. The responsibility to calculate the taxes correctly, to pay them promptly and to fulfill other requirements of tax legislation is laid upon taxpayers and official representatives of taxpayers (enterprises, institutions and organizations), as provided in the legislation of the Republic of Armenia.

Article 23. If the payment of tax is late then the taxpayers pay a fine at the amount of 0.25 percent of the amount of the tax for every day of delay /Amendments of March 23, 1996, effective from March 23, 1996; and in the part of the excluding of the words "and duties (except custom duties)" - amendments of July 19, 1996, effective from July 19,1996/.

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After producing the above-mentioned documents, a tax recalculation is made.

If accounting reports, balance sheets, calculations and declarations are late more than 2 months from the established period, the taxpayer pays a fine equal to 5 percents of the tax amount for every day of delay.

Article 25. The taxpayer pays a penalty equal to 10 percent of the tax amount for any incorrect or incomplete accounting records, balance sheets, calculations, declarations and other documents required by the Law.

Article 26. Taxpayers will be held administratively or legally responsible for the following: the omission of a record of income, or its incorrect recording; the evasion from produce a declaration of income, or the untimely producing the declaration, or the placement of a false data in the declaration; the concealing of the income (profit), or the other taxable object; tax evasion.

Article 27. In case of concealment of a taxable object or of the presentation of its reduced value, the taxpayer is to be levied the amount of the whole concealed or value-reduced object, plus a penalty equal to this amount. In case of a repeated violation within one year, the penalty will be doubled, if otherwise is not defined by the legislation of the Republic of Armenia /Amendments of June 6, 1992 /.

Taxable objects that are not recorded in accounting reports, balance sheets, calculations and declarations produced to the state tax inspection bodies are considered to be concealed or reduced in value.

The tax amounts on concealed or reduced taxable objects are paid to the budget at the expense of taxpayers /Amendments of July 19, 1996, effective from July 19,1996/.

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Article 29. Taxpayers are obliged to pay the tax amount for concealed or value-reduced taxable objects and penalties provided by the Articles 23, 24, 25, 27 of this Law to the budget within 10 days after receipt of a notice or demand from the state tax inspection bodies. If the tax amounts are not paid within the specified time period, as well as penalties due on concealed or reduced taxable object then the tate tax inspection bodies can exact these amounts for the whole period through a indisputable procedure.

Article 30. In cases when a taxpayer liquidates the profitable object or conceals his income (profit) and it is impossible in further to levy the taxes determined by the legislation, the state tax inspection body can take measures to levy the taxes before the reporting period. In this case, the state tax inspection body can demand the accounting reports, balance sheets, calculations, declarations and other documents, that are required by the Law before the date specified by the Law /Amendments of July 19, 1996, effective from July 19,1996/.

Article 31. In cases, when taxes payments are late, or the payments are incorrect, the state tax inspection body must present a notice of its requirements within 10 days. 10 days term begins as soon as the state tax inspection body learns from the late or incorrect payment of taxes /Amendments of July 19, 1996, effective from July 19,1996/.

Article 31-1. According to the legislation of the Republic of Armenia on separate tax types, and by consent of the Permanent Commission on Economy, Finance and Budget of the National Assembly of the Republic of Armenia, the Government of the Republic of Armenia can apply other rates of fines, penalties, other order for their calculation, payment and levying, than stated in this Law, on individual payers or group of payers /Amendments of April 18, 1993/.

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Article 32. If accounting reports, balance sheets, declarations and other documents required by the Law are presented late or incorrectly; if tax amounts are levied and submitted to the budget incomplete or late, and if the officials who are responsible for presenting information to organizations, institutions, associations and citizens about taxes they have paid, do not present this information according to the established order and promptly, they bear the responsibility held to them by the legislation of the Republic of Armenia.

The officials bear the responsibility held to them by the legislation of the Republic of Armenia for the following:

- untimely producing or incorrectly drafting accounting reports, balance sheets, calculations, declarations and other documents provided by the Law;

- incomplete and untimely deduction and transfer the tax amounts to the budget,

- not producing and untimely producing of information about the payments made to the enterprises, institutions, organizations and citizens in the procedure specified by the Law.

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Article 33. If superfluous amounts of taxes have been paid due to mistakes in calculations or due to violation in the specified levying procedure, then these amounts are to be reimbursed to the taxpayers or credited to the taxpayer's other payable amounts, within a month after the day the incorrect payments become known, for the next three years after the day of the incorrect payment.

An appeal about the reimbursement of superfluous paid amounts, presented to the state tax inspection bodies terminates the mentioned term.

Article 34. If employers do not levy tax amounts from employees promptly then these amounts are to be levied from earnings periods of no more than the last three months of employment. The superfluous amounts paid by mistake are to be reimbursed within a month after the day it becomes known, for the next three years after the day of the incorrect payment.

An appeal of the taxpayer about reimbursement of superfluous amounts terminates the mentioned term.

Article 35. The state tax inspection bodies by the procedure specified to the legislation of the Republic of Armenia compensate the damage (including lost potential income) caused to the taxpayers that have taken place due to non-fulfillment of obligations held on the state tax inspection bodies.

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Article 36. When levying taxes the actions of officials of the state tax inspection bodies can be complained of in the body to which these bodies subordinate. The complaints are considered and decisions about them are to be made no later than 30 days after the complaint has been received. These decisions can be appealed in a superior state tax inspection body or in a court, within a month after the copy of the decision has been received by the appealing person.

Article 37. Complaints against the actions of officials of the state tax inspection bodies associated with the assignment of administrative penalty will be processed according to the legislation on administrative wrongs of the Republic of Armenia.

Article 38. Complaints against the actions of officials of the state tax inspection bodies does not terminate the levying of taxes. The body considering the complaint has the right to terminate the tax levying until the final consideration of the complaint.

Article 39. If international agreements of the Republic of Armenia establish the rules differ from the rules included in this Law, then the rules of the international agreements are applied.

The mentioned rules are effective after ratification by the Supreme Council of the Republic of Armenia of the above- mentioned agreements.

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