Armenia to remove taxes on some insurance compensation claims

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YEREVAN, May 6. /ARKA/. Armenian parliament members have completed today discussions in the second and final reading of a set of amendments to the Tax Code, designed to regulate the payment of insurance compensation claims.

MP Arkady Khachatryan from the opposition Bright Armenia party said that under the current law the collateral of borrowers is insured, and in the event of an insured event, insurance payments are received by banks, which use the money to repay the loan and to give the remaining part to the borrower.

“According to the current legislation, these one-time payments are included in the income base, from which income tax is levied. At the same time, when the balance is returned to the borrower, it is considered as income. As a result, it turns out that an individual or organization can incur losses two times,” he said.

Under the proposed changes, insurance payments will not be considered as income and no taxes will be levied from them.
The changes will have retroactive force and will apply to procedures that took place after January 1, 2018.

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