GOVERNMENT OF ARMENIA INTENDS TO ACTIVATE CAPITAL MARKET THROUGH LEGISLATIVE CHANGES

ArmInfo
2009-06-11 17:33:00

ArmInfo.Today, the parliament of Armenia passed the second and
final reading of alterations and amendments to the Laws ‘On VAT’ and
‘Profit Tax’.

As deputy Finance Minister of Armenia Suren Karayan said, the primary
goal of introduced bill is stimulation of turnover the companies’
securities in the capital market. Moreover, it is expected that
the companies will carry out their activity transparently with the
elements of corporate management.

The bill somewhat regulates the expression ‘the right for free
circulation of securities’, which has been replaced by the expression
‘shares belonging to the public’. Another peculiarity of the bill
concerns 20 and more percent of shares in the companies’ authorized
capitals. So, if 20 and more percent of shares of one or another
company are in ownership of one or another person and these shares
are registered at the Stock Exchange, where they can be acquired
and sold, this company receives tax remissions. In particular, it is
envisaged that these remissions will make up 50% on the value added
tax, though provided that the annual profit of a company will not
exceed 300 mln drams. Moreover, the number of shareholders of these
companies should make up 100 and more people. These companies also
get serious remissions on the value added tax. So, the government
intends to activate a system of corporate management, that will lead
to the capital market development. In general, the matter concerns
three conditions – number of shares, shares belonging to the public,
and a number of shareholders. Some VAT and profit tax remissions
are received by the companies in which 20 and more percent of shares
will belong to the state. All these conditions should be secured in
the Central Depositary and Stock Exchange which are controlled by
the United Swedish Exchange. Both structures will have to provide
a corresponding information to the tax agencies to avoid possible
infractions. Nevertheless, the tax agencies, during their work,
are enabled to hold inspections in one or another companies for
verification of the data available.