From January 1, 2020, Importers of Vehicles Up to 4 Years Old Will be Exempt from VAT

The government has approved a draft decision that proposes to exempt organizations importing vehicles manufactured within the last four years from value-added tax (VAT) starting from January 1, 2020.

The legal action is intended to extend to imports carried out until December 31, 2020. "The draft proposes to exempt from VAT the importation of vehicles classified under HS Codes 8702 and 8703, manufactured within the last four years, by entities recognized as VAT payers," the justification states.

The government aims to encourage the importation of vehicles with lower emissions and alleviate the impact of the application of new customs duty rates, resulting from the expiration of a preferential period for the import of vehicles into the EAEU territory for Armenia from January 1, 2020. This is expected to contribute to an increase in the circulating funds of VAT-paying organizations operating in the sector.