VAT Exemptions

As of September 2013 the following activities are exempt from VAT (Law on VAT, article 15):

Education

Tuition fees charged by secondary and higher educational institutions; creative and cultural centers for children and youth; sports, music, painting and art educational institutions; vocational training institutions;
Sale of books for children and schoolchildren; notebooks, painting and music books; publications by schools, scientific organizations of higher educational institutions and the National Academy of Sciences.
Implementation of main scientific and educational projects; participation fees for educational competitions and Olympiads recognized by the Ministry of Education.
Services provided by pre-school facilities, nursing homes, orphanages, disabled care facilities, retirement homes; goods and services provided by those placed in these institutions.
Sale of newspapers and journals.

Health

Sale of donor blood, breast milk, prosthetic and orthopedic items.
Medical assistance services (including prophylactic diagnostic measures).
Medical equipment and supplies.
Goods related to the treatment and prepared within the context of medical assistance and by patients in prophylactic enterprises and organizations, and services rendered by them

Financial Services

Insurance and reinsurance and related intermediary services.
Pension insurance operations and related intermediary services.
Services for taking deposits, maintaining bank and investment accounts, including payment services.
Issuance of bank guarantees and letters of credit.
Sale, safe keeping and recording of securities by financial institutions.
Issuance, transfer and assignment of promissory notes, checks, payment securities and payment documents, cards and other instruments; their disposition by other persons.
Purchase, sale and exchange of foreign currency (banknotes or coins, with the exception of numismatic money); execution of futures contracts, options and similar transactions in Armenian drams and foreign currency.
Cash withdrawal services.
Financial agent (representative) services provided by financial institutions.
Management of investment funds.
Investment fund custody.
Entrusted management of securities.
Sale of the standard (bank) precious metals bullion, opening and keeping precious metal accounts, sale of bank bullion to banks and lending organizations.
Brokerage and other intermediary services.
Sale of collateral previously belonging to individuals not considered individual entrepreneurs that has become the property of the bank.
Services for accepting money and making payments.
Interest earned by financial institutions from financial leasing.
Financial leasing of goods which were imported by a financial institution and where the importation was exempt from VAT.
Sale of asset backed securities to a securitization fund.

Agriculture

Sale of agricultural machinery, fertilizers, pesticides, seeds and planting material.

Other

Services provided by funeral homes and cemeteries, other funeral-related services and sale of accessories.
Religious ceremonies, sale of religious items to and by religious organizations, as well as sales of these items by the religious organizations.
Delivery of goods and provision of services for the preparation of credit and grant programs of international financial organizations;
Free transfers to non governmental (including charitable) and religious organizations.
Sale of precious and semiprecious stones specified in the list approved by the Government.
Sale of precious metals and half-finished jewelry articles of precious metals.
Sale by the manufacturer of handmade rugs produced in Armenia.
Import of cultural values.
Supply of irrigation water by associations of water users.
Supply of goods in free economic zones; provision of services to the organizer/operator of the free economic zone.
Operation of casinos, gambling slot machines and Internet gambling (effective from January 1, 2014).
Sale of tobacco products by persons other than manufacturers and/or importers of such products (effective from January 1, 2014).
Supply of goods and provision of services within humanitarian aid and charitable projects (activities) by foreign countries, international organizations, foreign and local NGOs, religious and similar organizations, individual donors; supply of goods and provision of services by Armenian VAT payers that are directly related to implementation of such projects and have significant importance for them. The humanitarian or charitable nature of the project (activities) and the scope of exempted goods and services are defined by tax authorities, unless directly mentioned in Armenian legislation, including international treaties.
Exchange of company stock for property owned by an individual not registered as an individual entrepreneur. There is an exception to this rule where the property invested is real property and the corresponding stock is transferred by the individual within three years following the investment.

The following transactions are not subject to VAT:

Payment of state duties.
Completely or partially free provision of goods or services in cases provided by the Government.
Provision of free services within the warranty period defined in public contracts.
Transfer of ownership of stock and privatization transactions.
Transactions for reorganization of legal entities.
Transfer or ownerless property, treasure and escheat property;
Subsidies, subventions, grants and receipt of other amounts for which does not essentially create an obligation to supply goods and services.
Exchange of property owned by the state or a municipality for stock of a legal entity.
Transfer of property to the state in the form of confiscation of property or donation and renunciation of rights over a land plot in favor of the state or a municipality.
Exchange of land and other real property with the state or a municipality.
Supply of goods and provision of services by Armenian budgetary institutions to the extent that proceeds were transferred to state or municipal budgets.
Import by individuals of personal property specified in the law.
Import of goods for personal use by citizens entering Armenia for permanent residence.
Import of personal property by Armenian diplomats and clergy of the Armenian Apostolic Church following their service abroad.
Re-export of goods, except for those imported under “temporary import for processing” regime.
Transfer or infrastructural assets by the concessionaire to the grantor of the concession during or after the operation of the concession agreement.

VAT Deferrals

Payment of VAT for import of the following goods is deferred for a period of 1-3 years depending on the customs value of the goods:

Medical, surgical and laboratory sterilizers and parts thereto;
Industrial dishwashers; machinery for cleaning and drying bottles and other containers; machinery for filling bottles, cans, boxes, bags or other containers, sealing or labeling, equipment for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including, enveloping heat-shrink wrapping machinery);
Cranes, including cable cranes, mobile lifting frames, straddle carriers and works trucks fitted with a crane;
Bulldozers, angledozers, graders, levellers, scrapers, mechanical shovels, excavators, shovel loaders, self-propelled tamping machines and road rollers;
Machinery and other equipment for moving, grading, developing, tamping, compacting earth, minerals or ores; extracting or boring machinery; pile-drivers and pile-extractors; snow-plows and snowblowers;
Presses, crushers and similar machinery used in manufacture of wine, cider, fruit juices or similar beverages;
Other machinery for making products from paper pulp, paper or paperboard, including cutting machines of all kinds, etc.
Roll offset printing machines; office machines for sheetfed offset printing (sheet size not exceeding 22 x 36 cm); other machines for offset printing; machines for letterpress printing; machines for flexographic printing press; machines for gravure printing; other machines for offset printing;
Automatic sewing machines and other industrial sewing machines; needles for sewing machines; furniture, bases and covers specially designed for sewing machines and parts thereof;
Machinery for preparing, tanning or working hides, skins or leather or for making or repairing footwear or other articles of hides, skins or leather;
Machines for the assembly of electrical or electronic lamps, tubes or cathode ray tubes or gas discharge lamps, in glass envelopes; machines for manufacturing or processing of the hot glass or glass products;
Equipment for producing tobacco;
Machinery for public works, building or other similar works;
Machinery for the extraction or preparation of animal or fixed vegetable fats or oils;
Presses for the manufacture of particle board or fiber boards or boards of other fibrous materials and other machinery for treating wood or cork;
Machines for making rope or cable;
Industrial robots;
Evaporative air coolers;
Machinery and mechanical appliances for working metal, including machines for winding electric wire coil;
Machines and mechanical appliances for blending, mixing, crushing, grinding, screening, sifting, homogenizing, emulsifying or stirring;
Other machines and mechanical appliances having individual functions and parts thereto;
Wind power generating sets;
Dump trucks designed for use in off-road conditions.

Payment of VAT is deferred for the following periods:

One year if the customs value of the goods does not exceed AMD 70 million (approx. USD 170,000),
Two years if the customs value of the goods exceeds AMD 70 million (approx. USD 170,000),
Three years if the customs value of the goods exceeds AMD 300 million (approx. USD 730,000),

Payment of VAT for import of the following goods is deferred for one year:

Silica sand and quartz sand;
Chalk;
Calcined or sintered dolomite;
Carbonates; peroxocarbonates (percarbonates), ammonium carbonate containing ammonium carbamate;
Ethylene polymers in primary forms;
Polymers of propylene or of other olefins in primary forms;
Polymers of styrene in primary forms;
Polymers of vinyl chloride or of other halogenated olefins in primary forms;
Polymers of vinyl acetate or of other vinyl esters in primary forms, other vinyl polymers in primary forms;
Acrylic polymers in primary forms.

Payment of VAT may be deferred for three years for import of goods other than those appearing on the lists above if the import is made within an investment project approved by the Government of Armenia and the customs value of goods exceeds AMD 300 million (approx. USD 730,000).

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VAT Exemptions and Deferrals Under Armenian Law