REPUBLIC OF ARMENIA Tax Compliance and Crypto Assets

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The Republic of Armenia (RoA) has committed to adopting the OECD Crypto-Asset Reporting Framework (CARF) and aims to initiate the first automatic exchange of information by 2027, necessitating domestic legislation [12][20] - Currently, there are no specific provisions for crypto assets in the RoA's tax code, leading to uncertainty in tax treatment and valuation of crypto asset transactions [13][21] - The mission team provided a structured risk assessment template to the State Revenue Committee (SRC) to identify gaps in tax compliance related to crypto assets [14][39] Summary by Sections Executive Summary - The RoA's commitment to CARF requires the enactment of domestic legislation to facilitate automatic information exchange by 2027 [12] Recommendations - Finalize and document the Risk Assessment on Crypto Assets by July 2024 [19] - Review the draft law to ensure comprehensive coverage of crypto-asset-related activities by December 2024 [19][48] - Implement a step-by-step roadmap for the new laws once passed [19] Background - The RoA has committed to CARF and must enact domestic legislation to fulfill its obligations [20] - The SRC has drafted amendments to the tax code, which are under peer review by OECD experts [20][24] Key Issues - The lack of clarity in the current tax code leads to inappropriate tax outcomes for crypto asset transactions [33] - The SRC has identified gaps in the current tax framework and the need for reliable data to enforce tax compliance [41] Proposed Legal Framework - The SRC's draft amendments include provisions for tax obligations, rates, and reporting requirements, aligning with the forthcoming "RoA Law on Crypto-assets" [43][44] - Close coordination between the SRC and the Central Bank of Armenia (CBA) is essential for effective implementation [44] Next Steps - The SRC aims to close identified gaps to enhance the effectiveness of the RoA's tax framework and ensure compliance with CARF [26] - The mission team emphasized the importance of understanding the technical aspects of crypto asset transactions for effective law design [22][40]