A draft government decision on "Establishing the Procedure for Deregistering from Tax Records a Non-Resident Organization or Individual Entrepreneur That Does Not Have a Permanent Establishment in the Republic of Armenia" has been put forward for public discussion. The draft envisages establishing the procedure for deregistering from tax records non-resident organizations and individual entrepreneurs that do not have a permanent establishment in Armenia, with the process to be carried out exclusively electronically.
The new procedure applies to entities registered with the tax authority under the relevant provisions of Armenia's Tax Code, which are registered, in particular, when they carry out transactions subject to VAT in Armenia.
To be deregistered, it will be necessary to submit a corresponding application, which can only be sent electronically through the e-VAT system for non-resident VAT payers on the official website of the State Revenue Committee. The registration data available in the system will be filled in automatically in the application, and relevant documents may also be attached if necessary.
If, as of the day the application is submitted, there are no outstanding VAT tax obligations, the tax authority will make an entry on deregistration in the unified electronic register within one working day after receiving the application. The non-resident organization or individual entrepreneur will also be notified of this by email.
If, at the time the application is submitted, there are outstanding VAT tax obligations, the application will be rejected, and a notification of rejection will be sent through the e-VAT system. After the tax obligations are fully settled, it will be possible to apply again for deregistration; in that case, the tax authority will make an entry on deregistration in the unified electronic register within one working day following the day the new application is submitted.
The change fills a gap that for years made it practically impossible for non-residents to exit tax registration. Until now, the code simply did not provide for such a procedure, and if a non-resident VAT payer ceased operations in Armenia, there was no clear path to officially deregister. The draft addresses precisely this problem by proposing a procedure that operates within one working day when there are no tax obligations.
The difference in timeframes is noteworthy. In the case of the first application, the entry is made within one working day after receiving the application, while in the case of reapplying after settling obligations, it is made within one working day following the new application. At first glance this is a minor difference, but in practice it could affect the timeline for companies closing their operations in Armenia.
The condition for the decision to enter into force is also a practical signal: the regulation will not apply as long as it is not technically possible to submit an electronic application in the e-VAT system. As for rejection when tax obligations exist, this is a standard approach, but the question arises as to how consistently data on the amount of obligations will be reflected in the system at the time of application.
