On 20 August 2026, the State Revenue Committee disclosed that an investigation into a large‑scale construction project in Yerevan revealed potential tax losses exceeding 2.1 billion Armenian drams (approximately US$5.2 million). The probe found that, although the project’s documented construction costs amounted to roughly 665 million drams, an independent valuation of the same asset as a non‑cash contribution to equity exceeded 20 billion drams. The discrepancy suggests that significant portions of expenses, materials, and services were either undervalued or omitted from tax filings, enabling the developer to reduce taxable income and avoid value‑added tax, corporate income tax, and excise liabilities. The Committee has forwarded the findings to the Investigative Committee for possible criminal proceedings.
Key Takeaways
- Scale of Potential Tax Evasion: The estimated loss of over 2.1 billion drams represents one of the largest single‑source tax gaps identified by the SRC in recent years. If substantiated, the amount would equate to roughly 12 % of the Committee’s annual tax‑collection target, underscoring the material impact of sophisticated fraud schemes on public finances.
- Method of Concealment: The investigation indicated that the developer deliberately omitted or understated invoices for construction materials, labour, and subcontracted services, and instead recorded the project’s value as a non‑cash equity contribution. This maneuver allowed the company to circumvent standard tax reporting channels while still benefiting from the asset’s economic value.
- Referral for Criminal Investigation: Because the evidence points to intentional misrepresentation and potential fraud, the SRC has transferred the case to the Investigative Committee, which will determine whether criminal charges under the Armenian Tax Code and Criminal Code are warranted. Concurrently, the SRC may pursue civil recovery of unpaid taxes, interest, and penalties.
Disclaimer:This article is compiled and summarized based on publicly available information and is for general information and academic exchange purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. For tax planning, please consult a qualified professional tax advisor or legal counsel.
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