Regimes Of General Taxation, Sales Tax, Presumptive Payment And License Fee

Tax regimes of general taxation, sales tax, presumptive payments and license fees are in force in the Nagorno-Karabakh Republic.

Commercial organizations and individual entrepreneurs engaged in trading through shops, stalls (pavilions), and warehouses are taxed under the tax regime of sales tax, notwithstanding if they have filed a declaration thereon. The sales tax replaces VAT and/or profit tax (income tax).

For presumptive payment, a taxpayer must be operating in the field concerned if he is engaged in certain types of activities. The following are examples of such:

  • trading activities through shops, pavilions, stalls with trading area not exceeding 10 square meters;
  • activities in the sphere of public catering;
  • activities related to motor vehicles;
  • activities related to hairdresser services;
  • activities related to parking services, and others.

The presumptive payment replaces VAT and/or profit tax (income tax).

Physical persons (including sole proprietors) that meet the requirements of the law “On license fees” are deemed as license fee payers who have sales turnover of  up to AMD 12000.0 thousand during previous year or at any period of the current year when engaged in certain types of operations. The following are examples of such:

  • trading activities through shops, pavilions, stalls, shop car, motorcycle shop, powered industrial car, powered industrial motorcycle with trading area not exceeding 10 square metres;
  • transportation of passengers via light motor vehicles;
  • transportation of freight via trucks;
  • auto service and repair shop including car wash through coin machines;
  • organization of computer games;
  • manufacture and repair of shoes and other leather products, clothing manufacture and repair upon population order;
  • preparation of wood products, furniture and home furniture repairs;
  • language training courses;
  • dancing, singing trainers’ activity;
  • banquet-runner activity. 

A natural person or sole proprietor is deemed as license fee payers of his own free will.

When a person does not meet the requirements for tax regimes of sales tax, presumptive payments or is not a license fee payer, the taxes will be calculated under general taxation system.

For more details, please consult the tax legislation in force.