"Fact". Exclude cases where large companies break up their businesses to get tax benefits; project
"Fact" daily writes: "The State Revenue Committee proposes additions and changes to the Tax Code. The project aims to encourage competition, because as a result of the adoption of the project, cases will be excluded when large, often dominant organizations split their businesses in order to obtain tax benefits, advantages, thus creating unequal competitive conditions in the market for other businessmen. According to the Ministry, the adoption of the project will contribute to the improvement of competition in the sphere of import and export, and the development of small and medium enterprises.
As a result of the adoption of the project, there will be no increase in state budget costs. Instead, taking into account the availability of effective means to fight against entities engaged in business activity through tax abuse, significant increases in budget revenues are possible. The concepts of tax planning scheme (method), tax benefit and abuse of tax planning methods are regulated within the provisions of the draft, cases of tax payers being considered to act in concert based on common economic interests. At the same time, regulations are planned on taxpayers who abuse tax planning methods not to be considered as turnover tax payers or micro-enterprise subjects and to cease to be considered as such.
It is noted that the Tax Code lacks a general rule on abuse of tax planning methods. Global experience proves that more and more often taxpayers use mechanisms and transactions that are "permitted" by legislation, but do not derive from the actual economic conditions of activity and aim to hide income, to distribute business income formally among different entrepreneurs (defined in order to use the privilege several times), reduce revenues by artificially increasing costs, etc. Similar behavior is characterized by the term "aggressive tax planning" and the struggle to exclude it is also being waged at the international level. For this purpose, the multilateral convention "On the implementation of measures related to the tax treaty in order to prevent the erosion of the tax base and profit shifting" was adopted, to which Armenia also joined, but the concept of abuse of tax planning methods is absent in our domestic legal regulations, which is why the project was developed.
More details in today's issue of the newspaper
