The new NGO Law has created unequal competitive conditions between the Non-Governmental and Commercial Organizations in case of engaging in entrepreneurship. Organizations that are professionals in the entrepreneurship sector say this. “In case where the commercial organizations have an opportunity to work on turnover tax, the NGOs work in the field of value added tax, and have shall pay income tax,” Ms Satik Badeyan, President of “Association of Social Enterprises of Armenia” said.
The law that was adopted last year and entered into force in February this year includes a provision according to which the non-governmental organizations can directly be involved in entrepreneurial activities. Formerly, the organizations were creating commercial organizations, limited liability companies, having the aim to conduct such activities.
Having the aim to solve this problem, the State Revenue Committee is conducting discussions with the “Armenian Lawyers’ Association” NGO (ALA). Simultaneously, ALA organizes training for NGOs on the New NGO Law and awareness seminars in Yerevan and in the marzes in the scope of “Commitment to Constructive Dialogue” Project.
The regular training for the local organizations was held on 17 May, in Sevan City of Geghakunik marz.
Mr. Karen Zadoyan, President of the Armenian Lawyers’ Association, “Commitment to Constructive Dialogue” Project Manager facilitated the training.
Mr. Zadoyan said that it is possible that the State Revenue Committee will not consider the free services provided by the NGOs in the scope of grant projects under the term of gratuitous assets, and in this case it is expected to charge profit tax. Actually, until now the NGOs were providing free services to their beneficiaries through grants funds, and such services may be charged under the new law. “If this approach is formalized, then all non-governmental organizations may face serious problems, as all organizations provide free services to their beneficiaries on the account of grant funds.”
In addition, Karen Zadoyan referred to the volunteer institute under the new law. “The new law allows you to have volunteers. If they work more than 20 hours a week, you can sign a contract with them, defining the provisions that ensure safe working conditions and compensate the costs of volunteer work,” ALA President said.
After the training, ALA President provided individual counseling to the representatives of NGOs who wanted to learn details about the new changes and had private matters.
The training in Sevan City was organized on the initiative of the Association of Social Enterprises of Armenia, in the scope of “Commitment to Constructive Dialogue” Project.
Notably, the training is conducted in the scope of the Europe Days.
The “Commitment to Constructive Dialogue” action is implemented with the financial support of the European Union by a Consortium of civil society organizations, which are “Armenian Lawyers’ Association”, 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.
Gevorg Tosunyan
Aleksander Sargsyan
