BTA Minister Hayrapetyan offered to provide state support to attract labor migrants

by times news cr

“At⁣ the November‌ 11 extraordinary session of the Standing Committee on Economic ‍Affairs of the National Assembly, the drafts of the laws “On State Support of the⁢ High Technologies Sector” and “On Amendments and Additions⁣ to the Tax Code of the Republic of Armenia” were approved.

The bill was presented by RA Minister of High-tech Industry Mkhitar Hayrapetyan, emphasizing that the package of projects was considered urgent by the RA government.

The minister noted that the package of projects proposes to define a number of directions of state support and ​some tax benefits in the field ⁢of ⁣high technologies.

“In‍ particular, the draft law “On state support of the high-tech sector” ⁣envisages providing state support to organizations and⁢ individual entrepreneurs involved ​in the high-tech sector in the following directions:

1) for the involvement of⁤ labor migrants, who‍ perform ⁤professional work and are considered hired employees of ⁢the given economic entity. In addition, the state⁤ support will be provided to the economic entity ⁤in the⁤ amount of 50 percent of the income ‍tax amount calculated on the migrant worker’s salary and other payments equal to it.

2) for attracting new employees,

in the amount of 100 percent of the ⁢amount ⁢of income tax calculated⁢ on the​ salary of new employees and other payments equal to it, if the quarterly average number of ⁣all hired employees of the ⁢business entity does not exceed 30, mainly applies to startups.

in the amount of 50 percent​ of the amount of income tax calculated on the wages of new​ employees ⁣and⁤ other payments equal to it, if​ the quarterly⁤ average number of all hired employees is‌ 31 or more;

It is also noteworthy that the⁢ state ‌support for ​new ​employees is ⁤provided for three calendar years from the‌ moment ⁢of the ​employee’s first employment.

3) In order to compensate the⁣ educational expenses incurred in the field of preparation and training‍ of personnel performing professional work of the economic entity,

in the⁢ amount of 50 ‍percent of the amount of income⁢ tax calculated​ on the salary and other payments equal to ⁢the‍ salary of employees performing professional ⁣work of the economic entity, if ⁣the quarterly average number ⁢of employees⁣ of the organization or individual entrepreneur does not⁤ exceed 30. In‌ this case, ​in the​ case of ‍a small organization with up to 30 employees, it is also proposed to compensate the business trip‌ expenses incurred by the economic ‌entity for the purpose of training and training of personnel, for which ⁢compensation⁤ is set by​ the sub-legislative legal act to⁣ set an upper limit of 2 million drams.

in the amount of 25 percent of the⁤ amount of income tax calculated on the salary ⁣of employees ​performing professional work of an economic entity and other payments equivalent‌ to ​it, if the quarterly average⁣ number of employees is 31 or more”, the ⁣minister presented, emphasizing⁤ that at ⁣the same ⁢time​ it is proposed that the​ above-mentioned​ three directions the amount‍ of assistance provided for ⁣the accounting period⁢ cannot ⁣exceed 50% of ⁣the‌ amount of income tax calculated and paid‍ for the employees for the same accounting period.

It was noted that ⁤after the adoption of the legislative‌ package, by-laws will define the types of activities subject to state support in the high-tech sector according to economic activity classifications, ‍support provision‍ and other necessary procedures.

The minister also informed that the provision of ⁢state support will be implemented through a‌ self-service ​platform, which⁤ is planned to be‍ launched‌ by July 1

The support provided by ⁣the projects will be provided to organizations and individual entrepreneurs operating‍ in the ⁢general taxation⁢ system and the turnover tax system for the period from January 1, 2025 to January 1, 2032. Moreover, the organization or individual entrepreneur ‌operating⁢ in ⁢the ⁢turnover tax system may continue​ to⁤ use the support after the​ third calendar year following the⁤ calendar⁤ year ⁤of ‍starting to ‍use the support, if it operates in the general taxation⁣ system.

Then it was referred to the ‍tax benefits provided ⁤by the package of projects, in the first direction of which the following tax benefits are​ offered.

reducing the turnover tax rate by 2.5 times, setting it at 2⁤ percent ⁢instead of 5 ​percent;

providing for the possibility of additional reduction of the gross income for‍ the purpose of taxation‌ with profit tax in the amount of 200 percent ‍of the salary paid ‍to the staff performing professional‍ work, but not more than 50 percent‍ of the calculated tax base,

Revision of the rules for recognizing the gross‍ income for the purpose of taxing the ⁢targeted funds received by business entities that declared an average list number of up⁣ to 30 employees​ during the tax year, with the logic that these funds are recognized ⁣as income not during the tax year in which they were received, but⁣ during the tax year , in which those funds or assets acquired, constructed, created or developed with those funds are recognized as an ‌expense or loss.

In the second direction, the project proposes to establish the ⁣following ⁢tax benefits.

halving the income tax rate from 20%​ to 10% for the salary ​and incomes equal to it paid to ⁢the professional staff involved in scientific and research activities,

providing for the possibility of additional⁤ reduction⁣ of the gross income for the purpose of taxation with profit tax in the amount of 200 percent of the salary paid ‌to the staff performing professional work, but not more than 50 ⁤percent of the calculated‌ tax base,

Setting the ⁤minimum depreciation period for fixed assets used for the implementation of scientific ⁢research and experimental development works ‍for the purpose of taxation with profit tax at the discretion of the profit tax payer, but not less than one year,

For the purposes ⁤of ​taxation with profit tax, the gross income is reduced by the ⁤amount ​of expenses incurred directly by the taxpayer or on his order within the framework of scientific research and‍ experimental development works, in full ⁤during the tax year in which such expenses are incurred.

At the⁣ same time, it is⁤ proposed to establish that ​the mentioned privileges regarding research and development works will be⁢ applied‌ to​ economic entities that meet⁢ the standards set by⁢ the RA government and receive ⁤the positive conclusion of the ⁢professional commission formed by the government.

Tax benefits will also be provided⁤ for 7 years, from January 1, 2025 to January 1, 2032. In addition, the possibility to additionally reduce‌ the gross income for the purpose of taxing with profit ⁣tax in the amount of 200 percent of the salary paid to the staff performing professional work will ⁢be applied for the reporting year of 2024 as well.

“As a result of the adoption⁤ of the ⁤package of projects, it is expected to form⁤ favorable⁢ conditions for the progressive development of the high-tech sector, as well ⁤as for the implementation of scientific research works. It is also expected that it will serve ​as ​an incentive ⁤to increase the productivity and competitiveness of the ‌economy of the Republic of Armenia, the development of the knowledge-based economy, the formation of the information⁤ society and

The chairman ⁢of the committee, Babken Tunyan, noted that the ‌submitted⁤ bill was discussed‍ in the working format in the committee, ⁤hearings were also held with the participation of companies in the sector. Then MPs Tadevos Avetisyan, Hovik Aghazaryan, NA Deputy ‌Speaker Hakob Arshakyan‌ asked questions to the minister, and ‍clarifications were given regarding them.

Minister Mkhitar Hayrapetyan emphasized that the regulations proposed by the presented package of laws are ​exclusively based on research data ‌and analysis.

Reference was⁣ also made ‌to the proposals presented by NA Deputy Speaker Hakob Arshakyan and Deputy Khachatur Sukiasyan regarding ‍bills. As a ⁣result of the ‌discussion, ‍it was ⁢decided that⁤ all the proposed changes will be‍ studied and the final position on them will be discussed during the⁣ first to the second ‌process.

Interview between⁤ Time.news ⁤Editor (T) and⁣ High-Tech Expert (E)

T: Welcome to Time.news! ‍Today we’re discussing the ‌recent legislative developments in Armenia’s high-tech sector. I’m ​thrilled to have an expert in⁤ the field, [Expert’s Name], joining us. Thank you ⁣for being here!

E: ⁤ Thank you for having me! It’s an exciting⁢ time for the high-tech ⁢sector ⁣in Armenia.

T: Absolutely! Let’s dive right in. The National Assembly has recently approved two important ⁢drafts regarding state support for the high-tech sector. Could you elaborate on what these laws entail?

E: Certainly! The‍ two drafts aim to provide substantial support​ to organizations and ‌individual entrepreneurs in the high-tech field. The⁢ main focus is⁢ to stimulate growth by offering tax incentives, as well as financial support for hiring and training staff. ‌This initiative is designed not only to boost ⁢local​ talent but also to attract skilled labor from abroad.

T: That’s fascinating. The bill presents a variety of incentives ⁣for businesses. Can you break down some of the key directions of state support mentioned by Minister Mkhitar Hayrapetyan?

E: ⁤ Definitely! One of the major components is aimed at labor migrants, where businesses can receive a 50% rebate on income tax for⁣ hiring skilled migrant workers. This should encourage companies to tap into a‌ broader⁤ labor market. Additionally, for⁣ startups looking to grow, there’s a 100% tax incentive for hiring their first 30 employees, which ​can significantly ease their financial⁤ burden in the early⁣ stages.

T: That sounds like a great opportunity for startups. What about companies that exceed that employee threshold?

E: ⁣For​ companies with ⁤more than 30 employees, the incentive is still substantial, albeit at a reduced⁤ rate of 50%. Moreover, these tax benefits are available for three years following a new employee’s first hire. This structure really incentivizes⁢ companies to expand their workforce, which is critical for the‍ sector’s growth.

T: It certainly appears to foster an environment ⁣conducive to growth. Now, I noticed that the packages also cover education expenses for employee training. How does⁣ that work?

E: Yes, this is another innovative aspect⁤ of the legislation. Companies can get a 50% tax rebate on salaries for employees undergoing professional training, ‍which⁢ incentivizes them to ⁢invest⁣ in their workforce’s development. For smaller organizations, this could include additional support for training-related travel, ⁢benefiting those who might struggle to fund professional growth.

T: It seems that the law is thinking ahead about workforce development. Moving on to taxes, what specific benefits does​ the legislative package⁤ propose?

E: The⁣ tax ‍benefits are quite⁢ significant. For instance,⁣ it⁣ proposes reducing the turnover tax rate by 50% ⁣for‌ businesses, alongside allowances that enable companies to deduct more from their gross income based on ⁤salaries paid to professional staff. In essence, these changes could free up capital that businesses ⁢can reinvest into research ​and development or further growth initiatives.

T: Speaking of research and⁣ development, how does this legislation support scientific and innovative⁤ endeavors in Armenia?

E: Great question! ⁢The draft includes a halving of the income tax rate for salaries of personnel directly involved in research activities and allows substantial deductions for any expenses related to scientific research. This is incredibly important for promoting​ innovation in a country where high-tech and‌ scientific advancements are key to economic growth.

T: Certainly ⁤impactful initiatives! With these new⁤ laws taking effect from January 2025 and running through 2032, what ‌are ⁤your thoughts on ⁢their long-term impact?

E: If implemented ‍effectively, these laws could ​position Armenia as a burgeoning hub for high technology and innovation. They ‍create a solid foundation for sustainable growth, especially⁢ for startups and small businesses that often struggle with financing.⁢ Moreover, by attracting foreign talent and encouraging local innovations, Armenia could significantly enhance its‌ competitiveness in the ⁢global⁤ market.

T: It’s exciting to think about the potential here. Before we wrap​ up, if‌ businesses want to take advantage of these benefits, ⁣how do they navigate the process?

E: ​There’s a self-service platform expected ⁣to launch by July‌ 2024 that will guide businesses ⁢through the application process for ⁣these supports.⁤ Clear communication from the government will ‍be crucial to ensure that all potential beneficiaries understand ⁢the processes and requirements.

T: Thank you, [Expert’s Name], for sharing ‍your insights today. It sounds ⁤like we’re ⁣entering an incredibly ⁢dynamic period for⁤ Armenia’s​ high-tech ‌sector.

E: Thank you! I’m confident that with this legislative support, Armenia can achieve remarkable progress in high ⁣technology.

T: We look forward to following these ​developments closely. Thank you to our audience for tuning ‌in, and stay informed on the latest news from Time.news!

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