On Peculiarities of Excise Tax in the Republic of Armenia
The excise tax is an indirect tax charged on the sale and importation of particular goods in the Republic of Armenia. The excise tax is established by the Law of the RA “On excise tax”. According to this law the following goods shall be subject to excise tax: beer, grape and other wines, wine ingredients, spirits (except cognac spirit) and spirit drinks, cigars, cigarillos and cigarettes with tobacco or its substitutes, petrol, raw oil and petrochemicals, diesel fuel, oil gas and other carbohydrate gases (except natural gas) and oils.
Individuals and legal entities importing or producing above listed goods must pay excise tax in the Republic of Armenia. For goods subject to excise tax that are manufactured (produced or bottled) in the territory of the RA from raw materials (including bottling or other type of packaging) obtained on a contractual basis with contractors (providers of raw material) who are registered in the RA, the provider of the raw materials shall be considered the taxpayer. Persons producing goods without state registration has the same obligation in the Republic of Armenia.
The objects of the excise tax are:
- goods subject to the excise tax imported to the Republic of Armenia under “import for free turnover” customs regime;
- the realization (including free of charge) in the territory of the Republic of Armenia of goods subject to the excise tax by the manufacturers;
- supply of goods as a contribution by conducting joint activities, if during conducting joint activities declaration of transferring an obligation of calculation and payment was not filed with the tax body.
In terms of implementation of the present Article, the in-kind payment for the work related to the goods subject to excise tax, their exchange or transfer, for free provision, compensation or other types of realization, shall be considered a taxable object. Tax base includes the price (including customs) of excisable goods or amount of goods. It is necessary to remember that for certain excisable goods excise tax is not collected, which is why tax legislation of the Republic of Armenia provides the cases when persons needn’t to pay excise tax.
Such privileges are established for:
- alienation (sale) of products exported from the Republic of Armenia and subject to excise tax, if the document confirming payment and tax calculation is available;
- excisable goods exported or imported in customs regime which is different from “import for free turnover” regime;
- importation and alienation of excisable goods confiscated or transferred to the State by the state of inheritance;
- excisable goods imported by individuals who are not individual entrepreneurs, and whose activities are not considered as entrepreneurial activity in accordance with provisions of law;
- alienation of non-bottled cognac with an alcohol content of forty percent or more;
- other privileges established by the law.
Below are some examples of rates of excise tax in the Republic of Armenia:
- Beer – 30 %, (not less than 105 drams per liter);
- Grape wines – 10 % (not less 100 drams per liter);
- Vermouth and other grape wines that contain vegetable or aromatic extracts – 50 % (not less than 750 drams per liter);
- Ethyl spirit – 50 % (not less 900 drams per liter);
- Alcoholic drinks – 50 % (not less than 500 drams per liter);
- Tobacco substitutes – 1500 drams per 1 kg;
- Raw oil and oil materials – 27000 drams per 1 t;
- Petrol – 25000 drams per 1 t;
- Cigarettes with filter and cigarettes without filter – 5000 drams and 1400 drams respectively for 1000 pieces.
Excisable goods with codes of FTH CD-2203, 2204, 2205, 2206, 2207, 2208, 2402 are subject to labeling, an order of which is established by the Government of the Republic of Armenia. For labelling goods produced in the Republic of Armenia it is necessary to file an application in 2 copies, copy of the document confirming the payment for purchase of excise labels, copies of reporting documents about the purchase of raw-spirit from the producers, copies of licenses, receipts confirming the payment of duties and certificates conformity (if necessary). Excise labels, which were not used, should be returned to the tax body or customs body. Taxpayers are not allowed to transfer excise labels to other persons.
The validity of excise label cannot be less than two years. In case of entering the new form of the excise label by the decision of Government of the RA, the term of validity is six months from the day of taking a decision.
Excise labels can only be issued to individual entrepreneurs and legal entities registered in the Republic of Armenia. When importation of goods into the Republic of Armenia it’s necessary to file to customs body an application about the purchase of excise labels, a copy of an agreement with a foreign party, report about the use of previously issued excise labels. An application must be filed before the importation of goods, except importation of alcoholic drinks (less than 25000 bottles), cigarettes and so on. Tax body takes a decision on the application within five days. Excise labels are issued to the importer for 90 (ninety) days term.
The cost of an excise label for an importation of ethylic spirit and alcoholic drinks into the Republic of Armenia is 100 drams, and tobacco production 25 drams. The cost of a label for production of ethylic spirit in the Republic of Armenia is 100 drams, alcoholic production 50 drams, and tobacco production 25 drams.
For taxpayers producing goods subject to the excise tax in the Republic of Armenia, the reporting period shall be established every month. Taxpayers shall for every reporting period pay the tax to the state budget of the RA before 20th of next month and shall present to the appropriate tax body the calculation of the excise tax after every quarter (three months) before 20th of the next month.
Importers of excisable goods shall pay excise tax within ten days after the importation of goods into the Republic of Armenia and they are not obliged to submit a tax calculation to tax body. But importers from the EAEU countries importing goods from the EAEU countries shall pay excise tax before 20th of the next month.