SOME COMPANIES NOT TO PAY VAT FOR IMPORTED TECHNOLOGIES AND EQUIPMENT AT BORDER IN 2009-2010

Noyan Tapan
Feb 13, 2009

YEREVAN, FEBRUARY 13, NOYAN TAPAN. All the companies to make
investments of over 300 million drams (about 1 mln USD) in Armenia will
not pay value added tax (VAT) on imported technologies and equipment
necessary for their production at the border in 2009-2010. This
decision was approved at the February 12 sitting of the Armenian
government. In the words of the RA minister of economy Nerses
Yeritsian, "this change will solve a number of urgent problems in
Armenia: social, economic problems, job creation, entrance into
international markets, etc".

The decision will first of all apply to Armenian-German VKS-Armenia
LLC.

This company was founded in 2007. It is the representation of famous
Textile Solutions company (Germany) and produces expensive textile
clothes. The minister announced that the company’s investment program
was approved by the operative staff set up at the government with
the aim of discussing programs on assistance to the private sector.

The company currently has 700 employees in Yerevan and Vanadzor,
and the investment program envisages increasing their number to 10
thousand by opening branches in various marzes of Armenia. It was
mentioned that in 2008 the company exported 324 thousand ready-made
garments to Germany.

In the opinion of the prime minister Tigran Sargsyan, it is a radical
change and the price of this decision makes nearly 5 billion drams. "We
take this step consciously because we give priority to new investment
programs that will create jobs in Armenia," he underlined. According
to him, meetings with representatives of the private sector show that
this decision may become a serious stimulus for establishment of new
enterprises in Armenia.

T. Sargsyan said that if the program submitted by VKS Armenia is
successful, the number of employees of the light industry will double
as compared with the number of those in the mining industry.