Nowadays, the most common type of Entrepreneurs in the Republic of Armenia are Private Entrepreneurs and Limited Liability Companies (LLC), and if we want to set up a business it is necessary to choose the most appropriate type, taking into account the specifics of the latter. In particular, a private entrepreneur is a natural person who, by virtue of the fact of state registration, has the right to carry out activities at his own risk without forming a legal entity on his behalf. A private entrepreneur has the right to engage in any type of activity that is not prohibited by RA law. The private entrepreneur has no balance sheet, no statutory capital (he does not accrue, does not distribute dividends), charter, as well as no property segregation, which means that the private entrepreneur is responsible for its responsibilities with the property belonging to it, except for the property on which, in cases defined by law, confiscation does not apply. Private entrepreneurs' activity carries certain risks related to the legal and individual capacity. Particularly, in the case of death of the individual, loss of consciousness, limitation of his capacity, the activity of a person registered as a private entrepreneur is terminated. Also, the right of the individual to engage in entrepreneurial activity cannot be transferred to his heirs on the principle of legal succession. It may be recalled that people registered as private entrepreneurs are compulsory-funded pension contributors and income taxpayers. Moreover, according to the RA Tax Code, private proprietors and notaries as natural persons are considered income taxpayers only in terms of personal income. A limited liability company is a company established by one or more persons (both legal and natural), the authorized capital of which is divided into shares in the amount defined by the charter. LLC, as a property, has a separated property, unlike a private enterprise, and takes the responsibility for its obligations with the property. At the same time, LLC is not responsible for the obligations of its participants with that property. The founding document of an LLC is the charter approved by its founders, and the current activities of the company are carried out by the executive bodies headed by the executive director. The latter acts on behalf of the company without a power of attorney represents the company’s interests, concludes transactions, which in the case of a private enterprise is carried out by the person registered as a private entrepreneur. In the case of a limited liability company, the implementation of cash transactions is subject to documentation and they must be registered in the cash register book. It should be noted that this regulation does not apply to persons registered as private entrepreneurs who do not operate in the field of VAT taxation.

How to document e-commerce?

According to article 380.1 of the Tax code, an electronic cash register may be used by companies and individual entrepreneurs to place orders for the delivery of goods, the provision of services, or the execution of works within the framework of orders accepted through the website or electronic applications (electronic trading platforms). An electronic cash register is software that enables you to generate an electronic cash register electronic receipt for the delivery of goods, services, or work sold through a website or electronic application (e-commerce platform). The electronic receipt is formed by transmitting electronically the information to the electronic systems of the tax authorities, obtaining a fiscal number from the tax authorities, and reflecting the information to be printed on the electronic receipt.

06.04.2021

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When is the stamp duty paid at the expense of the employer? When is it subject to return to the employee?

According to the Law of the Republic of Armenia "On compensation of damage caused to life or health of the military personnel during the defense of the Republic of Armenia", the stamp duty is required to be paid by residents of the Republic of Armenia working in Armenia or outside Armenia underemployment or civil law contracts, and non-residents working in Armenia underemployment or civil law contracts, individual entrepreneurs and notaries. According to the same law, the above-mentioned persons do not pay stamp duty when they work under only one employment contract and whose salary after all deductions (taxes, other mandatory payments (including stamp duty) defined by that employment contract) does not exceed the minimum salary established by the RA legislation. In this case, instead of the mentioned persons, the stamp duties are paid by the employer paying the income of the given persons at his expense. Let's say, the employee receives a gross salary of 92.000 AMD within the framework of the only employment contract. After deducting taxes and other mandatory payments (including stamp duty), the net salary will be equal to 67.540 AMD. As the net salary does not exceed the minimum salary defined by the RA Law "on Minimum Monthly Salary" - 68.000 AMD, the stamp duty is paid by the employer at his own expense. Thus, the employee is paid 68.540 AMD. Let's answer the question when the stamped payment is subject to return to the employee. According to the Law of the Republic of Armenia “On compensation of damage caused to life or health of the military personnel during the defense of the Republic of Armenia”, if a natural person works under an employment contract at the same time, is an individual entrepreneur or notary then that individual is entitled to a refund of the stamp duty paid on more than one tax basis. The stamp duty can be reimbursed to those individuals who work under an employment contract with more than one employer or receive income under more than one civil contract for the performance of work or services during one reporting period․

06.04.2021

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In 2021, the rate of mandatory funded pension will increase

The funded pension payment is the payment made by a participant or another person in favor of a participant in order to receive a mandatory or voluntary funded pension. Mandatory participants of the system are employees born after 1974, individual entrepreneurs, notaries, and those who are employed for the first time after 2014. The funded pension payment is 10% of a person's monthly income. If the income of the participant does not exceed the threshold of 500.000 AMD 3.5% is paid by the person, and the other 6.5% by the state. If the income varies in the range of 500.001 to 1.020.000 AMD, the state pays 32.500 AMD, and the participant- the difference between 10% of the income and 32,500 AMD. If the monthly income of an individual exceeds 1.020.000 AMD, the state pays 32.500 AMD, and the participant - 69.500 AMD. Suppose, an individual receives a gross salary of 650.000 AMD under an employment contract. Its mandatory funded pension payment will be 32.500 AMD (650.000 * 10% -32.500). If the employee's monthly income is 400.000 AMD, his mandatory funded pension payment will be 14.000 AMD (400.000 * 3.5%). From January 1, 2022, the mandatory funded pension payment for the income up to AMD 500.000 will be 4.5%. For income ranging from 500.001 AMD to 1.020.000 AMD, it will be the difference of 10% of income and AMD 27.500. In case of monthly income more than 1.020. 000 AMD, the payment will make 74.500 AMD. https://triple-c.am/arm/

06.04.2021

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