State Support of Information Technology in Armenia
Information technology in Armenia
In recent years Information Technology in the Republic of Armenia has essentially improved, and now IT sphere is remaining one of the most promising directions for the economy of Armenia. Thereby the Government of the RA pays a big attention to the development of IT sphere, because it facilitates intensification of the activities of business entities and attracts new foreign investments to Armenia. On 17 December 2014 the National Assembly of RA adopted the Law “On state support of information technology”. This law is designed to regulate the order of activities in IT and provide the participants of this sphere with certain privileges.
Information technology
Initially let’s note, that in the context of this law, information technology means all types of technologies using computers, including information systems of software, service or management as well as information in all formats, including creation, change, storage, protection, processing, transfer and safe download of data and images.
According to the law, the following types of activity are subject to state support:
-software;
-advisory activity in the sphere of computer technology;
-activity on computer systems management;
-data processing, information placing in the network and related activity;
-actions related to web-portals;
-conducting education and research programs in the sphere of information technology.
Business entities having a right for assistance must comply with certain requirements. The Government of Armenia assists the beginning business entities; entities carrying out contribution of innovative and modern technologies; entities conducting education and research activity in the sphere of information technology and structures stimulating the development of IT in Armenia.
State support is expressed in creating favorable financial conditions for IT, attraction of investments and stimulation of foreign economic activity. For these purposes, authorized state body creates a program, which is subject to affirmation by the Government of Armenia.
Besides, some entities may use tax privileges, if they passed certification in established order. In Armenia the participants of IT shall be registered in administrative register of information technology.
Certifiable and certified entities must comply with several requirements:
-their certification must pass voluntarily;
they must be created with the aim of conducting software activity, advisory activity in IT sphere, activity on management of computer systems, data processing, storage of information in the network as well as related activities, activity related to web-portals, activity related to conducting education and research programs;
-they mustn’t be created as a result of reorganization of other business entity and mustn’t be subsidiary companies of any other entity;
-the number of their employees cannot exceed 30 persons;
-they cannot alienate the results of the types of activities, mentioned in the second point (except the activity on conducting education programs), to the residents of the RA, conducting activity in IT sphere in Armenia.
Alienation of capital assets when the certificate is valid, as well as concluding the agreement on conducting joint activity, is out of the list of activities stated in the second point.
The certificate shall be issued by certification commission, which consists of five members. The commission considers and discusses the applications on obtainment of certificates and issues, changes or refuses to provide them.
Taxation of information technology sphere in Armenia
With respect to the tax rates in the sphere of information technology in Armenia the legislator has established zero rate profit tax, having excluded the income earned from the realization of information technology from the gross income. Certified tax agent (employer) shall calculate income tax of his employees at the rate of 10 percent. Certified persons must submit reports on their activity for each half-year to certification commission not later than the 20-th day of the month, following after the reporting half-year.
In case if business entities comply with the requirements of the law, they must turn to authorized body to obtain the certificate within 3 months of a registration. They must submit:
-application;
-number of state registration of legal entity;
-description and direction of their activity;
-statement of applicant, that he will conduct activities that are allowed by this law;
-statement that establishment of the entity is not the ground for liquidation or reorganization of other business entity and it is not the subsidiary company;
-information on direct or indirect participation of other persons in charter capital of the applicant;
-reference on the number of labors and their information.
