In 2022-2023, RA citizens who left to the Russian Federation or other CIS countries as labor migrants receive letters from the State Revenue Committee saying that they have tax obligations towards Armenia.
Sergey is in the photo
A few days ago Iravaban.net had a conversation with one of our citizens who went to work abroad in Russia every year. According to Sergey A., he has been going to Russia for about ten years to carry out construction works and to send the income to Armenia to his family. He mentioned that he has not yet received a notification from the SRC, but he does not agree to pay taxes to two countries. “I cannot understand why do they make to pay taxes to two countries for the income earned from hard physical work in different weather conditions.”
According to him, they do not have any advantages as residents of EAEU member countries, but in the case of taxes, they will have to pay more money. “Let them not consider us as residents here, and let them charge 30 percent. The employer will pay 30 percent so that we do not face problems and pay the difference. Let the employer pay more instead of us, because we are citizens of another country. The appropriate part of our salary is paid to this country, Russia, but the additional tax will aggravate our financial situation, it would be better if there were such conditions in Armenia that we would not be cut off from our families to cover the minimum expenses, besides, the ruble has fallen so much that the money we sent is pennies in Armenia,” Sergey said.
It is noteworthy that the citizens were not informed on time about the adopted protocol, which the SRC was supposed to implement, but those citizens who received the notification noted that there is a special emphasis on the double taxation agreement concluded between the governments of Armenia and Russia. In other words, according to the SRC, this process is not double taxation.
The problem, however, caused dissatisfaction among expat workers and their families. Sergey’s wife, told us that her husband is abroad for a long time, far from his family, the children miss their father, but being away is for the well-being of the family. “At least we know that he is staying away from us for such a long time in order to live better, and we do not want to give up our country’s citizenship, to leave. Let them cancel that decision and not cause additional worries to people,” our interlocutor added.
Tatevik Bezhanyan
During the press conference held on 16 February of this, Tatevik Bezhanyan, an expert of migration program of the “Armenian Caritas” Benevolent NGO, said that in 2018 the CIS countries signed an agreement in Astana on the exchange of tax information. In 2020, RA ratified the agreement, in 2021, it began to receive information from CIS countries about RA citizens working there and paying taxes. According to the expert, most of the citizens of the RA go to Russia to work, because the fall of the ruble has affected their income, people barely manage to solve household problems with the money they earn, and they cannot even take care of educational or health issues. “This tax liability is a big burden for them. We are talking about amounts of 100 thousand and more.”
The latter suggested to the RA SRC to inform our citizens for the time being, and to start applying this form of taxation from next year. The expert also added that the problem is related to the EAEU agreement. According to this agreement, 13 percent tax is charged immediately for the citizens of EAEU member states, if they sign an agreement, and if the person leaves the country after the end of the tax year, it is possible to recalculate and charge the difference.
After the news about taxation, protests started among the citizens. On 21 February, residents of Gegharkunik marz blocked a section of the Yerevan-Martuni highway, expressing their dissatisfaction with the decision of the SRC. They demanded to cancel the decision on collecting taxes from the RA citizens working outside Armenia.
Karen Sargsyan
According to experts, imposing such a heavy tax burden on citizens may also affect the growth of unregistered workers. Iravaban.net spoke with economist Karen Sargsyan about the problem of unregistered workers . According to the economist, being an unregistered employee is a matter of tax administration, which is carried out both in Armenia and in Russia. He mentioned that although there are no clear statistics about unregistered workers, their number is decreasing. “The employer will be held responsible if he keeps an unregistered employee, and this will certainly not be beneficial for him. When traveling to Russia and crossing the border, the citizen is already in the field of view of the relevant authorities, and the strict tax administration implemented in the Russian Federation contributes to the fact that the number of unregistered workers is quite small.
On 23 February, during the government session, to Prime Minister Pashinyan’s question about how the work on legislative changes is progressing after the complaints among those going to work abroad, SRC Chairman Rustam Badasyan replied that they will follow the path of a phase-by phase version regarding the income tax.
On 26 February, the SRC presented the final draft on the unified website for the publication of legal acts. Basically, the citizens’ voice of protest has reached the place. Citizens whose money earned abroad does not exceed 12 million drams (about 2.7 million rubles) in one year will not be subject to double taxation.
In addition, the draft stipulates that the mentioned provision does not apply to those resident natural persons who received the mentioned income remotely in exchange for the performance of works or the provision of services on the territory of the Republic of Armenia, as well as to those resident natural persons who received the relevant income as defined by the Government from organizations (registered) in countries (geographic areas) with special liberal taxation systems.
Mariam Antonyan
