Armenian Taxpayers will be classified in high, middle and low risk groups

According to the Decree N 570-N of May 25, 2017, the Government of the Republic of Armenia established the order of classification of taxpayers by risk criteria, which will come into effect from January 1, 2018.

According to Article 336 (2) (1) of the RA Tax Code, taxpayers are classified into any of the following three categories:
a. High risk (up to 20 percent of taxpayers are included in the category per risk reduction).

B. Middle risk,
C. Low risk.

Based on the risk criteria, the taxpayer's risk level (unit) is determined, and then by the results of the risk (unit) determination, taxpayers are classified in high, medium and low groups.
It should be noted that the decision applies only to VAT and Turnover tax  payers.
In terms of the application of the risk system, there are 19 standards, such as the level of profitability (income level) of the taxpayer, availability of previous inspections, lack of profit or loss, etc.
VAT or turnover taxpayers, as well as organizations that have signed agreement on horizontal monitoring with RA government tax authority, are included in the low risk group, regardless of risk assessment results.
Taxpayers subject to mandatory audit, but not audited in due course as well as those who are obliged to publish annual financial statements in accordance with the Law of the Republic of Armenia "On Accounting", but not reported within the statutory timeframe, are included in the high risk group, regardless of risk assessment results.