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Persons engaged with the sale and buy in practice often receive spoiled product from the suppliers or during the guarantee period of the product while operating the fact of being spoiled appears. Return of product, replacing with a new one or compensation by money are designed by the contracts. Those persons suffer damage, and often their suppliers do not assume contractual obligations of compensating the damage. The tax legislation has no solution on this part. The RA Deputy Minister of Finance Arman Poghosyan noted presenting the addendum proposed by the Government in the Tax Code at the NA Standing Committee on Economic Affairs.

By the new regulation it is proposed to decrease the spoiled product obtained for commercial activity or the expenditure of the disclosed with the buyer during the guarantee period established by the public contract of the product supply and the spoiled product received back. The possibility of the decrease will be given in case, when the product supplier has not assumed contractual obligation of providing compensation for the spoiled product.

Spoiled product will be considered the product without decent qualitative features conditioned by the production process of the product, which cannot be used by its significance.

It is proposed by transitional provisions by January 1, 2022 to make the decrease on the remainder of the spoiled product by two percent of gross income of this year. It is suggested to make the law retroactive, and to apply the regulation to the relations emerged from January 1, 2022.

The Deputy Minister specified that the regulation will refer to the profit tax payers.

The deputies were interested in the way of carrying out the control towards the formed spoiled product, the processes after qualifying the already sold product as spoiled and which body will characterize the product spoiled.

As a result of discussions, the initiative was endorsed by the Committee.