In cases when a fundamental breach or fraud have taken place during the foundation of a non-governmental organization (NGO), it may serve as a basis for the State Revenue Committee to apply court with a request to suspend the NGO’s activity. Mr. Karen Zadoyan, President of the Armenian Lawyers’ Association, the EU funded “Commitment to Constructive Dialogue” Project Manager introduced this and other important legal norms provided by the new NGO Law.
The NGO representatives were presented the changes, obligations and controversial provisions of the new NGO Law, which came into force on 4 February, 2017.
Mr. Zadoyan noted that that are risks of launching direct entrepreneurship activity. He first of all informed the NGO representatives that the profit from entrepreneurship activities should be directed exclusively to the implementation statutory objectives of the NGO and cannot be distributed among the members and the leadership of the organization.
He said that until the end of 2017 the entrepreneurship companies may be taxed if they have a turnover of up to 115 million AMD. The threshold for NGOs is currently set up to 58,35 million AMD. Although under the new Tax Code the threshold for entrepreneurship organizations would be reduced to 58.345 million AMD, however before that there is an unequal approach between NGOs and business organizations.
Mer. Vahagn Hambartsumyan, President of SME Cooperation Association said that the NGOs will be taxed under the taxation regime in case when they have turnover up to 58,34 million AMD, and that if they will have a turnover exceeding that amount even by 1 AMD they will be taxed with VAT as well.
There is also another risk associated with the name of NGO. As it is known, when the commercial organization uses the words, “Armenian”, “Armenia” in its name, it will have to pay an annual due of 600 thousand AMD. And there is no regulation on non-governmental organizations, when the NGOs that have such word in their name are engaged in direct entrepreneurial activity shall they register a trade name and pay state due or not.
Notably, the training on the new law is conducted in the scope of the Europe Days. The “Commitment to Constructive Dialogue” Project is implemented with the financial support of the European Union by the “Armenian Lawyers’ Association” NGO in cooperation with its partners; Agora Central Europe o.p.s (an NGO from the Czech Republic), Armenian Center for Democratic Education-CIVITAS, “International Center for Human Development” Public Organization, SME Cooperation Association and Union of Communities of Armenia.
At today’s event Karen Zadoyan presented to the NGO representatives the objective and implemented activities of the project. Specifically, the program aims to strengthen the capacities of NGOs in 9 sectors. For this purpose the project has carried out research among 350 NGOs, raised and identified the existing problems.
