Measures carried out by the Investigation and Operational Intelligence Department of the State Revenue Committee uncovered cases in which three companies developing residential buildings in Yerevan allegedly underreported the actual value of sales of rights to purchase apartments and parking spaces.
The measures established that during transfers of rights to purchase apartments and parking spaces, the actual transaction values in a number of cases significantly exceeded the amounts specified in contracts.
Part of the money from buyers was intended to be received in cash, while lower values were reflected in the contracts. As a result, the actual sales turnover and resulting tax liabilities were not fully reflected in tax calculations. To verify these circumstances with factual evidence, controlled purchases were carried out involving the three developers.
In one case, in particular, the parties agreed on a total price of about $1,172,600 for the right to purchase a 187.1-square-meter apartment and a parking space, of which $467,750 was to be paid in cash. As part of the controlled purchase, $250,000 of the amount due in cash was actually handed to the director at the developer’s office.
Following the controlled purchases, three people were detained on the basis of a reasonable suspicion directly arising that taxes on an especially large scale had been evaded by concealing taxable objects.
A substantial discrepancy was confirmed between the actual sales prices of apartment purchase rights and the values reflected in contracts. In one case, in particular, the developer’s contracts listed apartment prices at 1.3 million to 2.1 million drams per square meter, while the measures established that the actual sales price of apartment purchase rights was equivalent to $6,000-7,500 per square meter. The sales price for the right to purchase one parking space in the same building was equivalent to $50,000.
At the same time, cases were recorded in which large cash payments were accepted for transactions resulting in rights subject to mandatory state registration. However, under Armenia’s Law on Non-Cash Transactions, payments exceeding 500,000 drams in such transactions, as well as their receipt, must be made by non-cash means.
The underreported sales turnover uncovered in the three cases totaled about 2.43 billion drams, while the resulting additional tax liabilities amounted to approximately 653.5 million drams. In two of the uncovered cases, reports of suspected crimes involving tax evasion on an especially large scale were sent to Armenia’s Investigative Committee, which initiated criminal proceedings.
In the third case, following measures carried out by the Investigation and Operational Intelligence Department, the business entity amended its submitted tax calculations and additionally declared the corresponding tax liabilities.
As a result of the operational intelligence measures and procedural actions, the business entities have already paid a total of 439.2 million drams into the state budget. (Panam)