Tax Free System Launched

A new Tax Free system has been launched in Armenia. According to a statement issued by the Ministry of Finance, this system applies only to those companies that pay value added tax (VAT) on purchases.

This system allows travelers to receive a refund of VAT paid on goods purchased upon their departure from the country. Within this new Tax Free system, stores in Armenia will carry specials signs and necessary instructions or information booklets will be available at all border crossings, as well as in service centers.

According to Mikayel Pashayan, Head of the Department for Investment and Development of IT Infrastructures at the Ministry of Finance, “Armenia is the second country in the CIS that has this system in place. Also, the Armenian model is the simplest because the whole system works on one platform. The foreigner presents his/her passport at different purchase points and that information from the foreign national is automatically transferred to all custom points in Armenia.”

The system can be used if the purchased goods have a Tax Free invoice or a Tax Free receipt, if the purchase from the same store (the same taxpayer) exceeds 100,000 AMD within a day (including VAT), if the VAT is more than 16,670 AMD and if the goods purchased have not been used until its export and has maintained its original packaging. The system will remain in force up to 90 days after a purchase is made. There are certain goods that do not fall under the Tax Free system; they include food, tobacco, medicine, goods with cultural value, vehicles or vehicle parts.

A mobile Tax Free system has been created for the new generation cash registers, which also operate electronically.

“We are ready to refund VAT up to 1.5 billion AMD for the realization of the Tax Free system. I would like to mention, as well, that in the past couple of days our domestic market turnover has been 100 million AMD and 25 million AMD has already been refunded to foreign citizens through the Tax Free system,” noted Pashayan.

The Ministry of Finance announced that the VAT paid by foreign citizens for purchased goods will be returned to them when they depart from Armenia at all airports or border crossings. For tax refunds they must present their passport, the VAT refund invoice or receipt tax invoice, a document of their purchased goods that are to be exported (a receipt or a cash register order or a bank transfer receipt),and the purchases noted in the VAT refund tax invoice (in the receipt tax invoice). If you are travelling by air you also have to present your airline ticket. The customs authority will stamp “To be Refunded” on the tax free invoice or on the cash register tax free invoice. The customs authority will also note the amount that shall be refunded, which can be by bank transfer within 30 days or in cash from different bank branches at custom points.