On October 29, 2026, the Administrative Court of the Republic of Armenia, presided over by Judge Anna Dilbaryan, upheld the claim filed by a company represented by LSA Law Firm against the State Revenue Committee of the Republic of Armenia (SRC), declaring invalid Tax Audit Report No. 3008214 dated September 3, 2024, which had imposed additional tax liabilities on the company totaling AMD 2,910,510,578, including taxes, penalties, and fines.
The company’s interests in Administrative Case No. VD/11936/05/24 (see https://datalex.am:443/?app=AppCaseSearch&case_id=38562071810006635) were represented by Gurgen Nersisyan, an attorney at LSA Law Firm.
The judicial dispute concerned a comprehensive tax audit report issued following an audit conducted at the company pursuant to a decision adopted within the framework of criminal proceedings under investigation by the Investigative Committee of the Republic of Armenia.
During the audit, SRC officials, relying on information obtained in the course of the criminal proceedings, including data extracted from the company’s commercial software, identified alleged violations involving the underreporting of sales turnover during the period from 2020 to 2023. On this basis, the company was assessed additional liabilities relating to corporate income tax, value-added tax (VAT), and violations of the rules governing cash transactions.
Disagreeing with the findings of the tax audit, the company filed a claim with the Administrative Court of the Republic of Armenia, seeking to invalidate the tax audit report issued by the SRC.
During the court proceedings, attorney Gurgen Nersisyan challenged both the procedure followed in conducting the tax audit and the legality and substantiation of the calculations made as a result of the audit. In particular, the attorney argued that the tax authority had failed to properly examine all circumstances material to the audit, had not ensured a comprehensive and thorough examination, had disregarded factual circumstances favorable to the taxpayer, and had incorrectly applied the relevant provisions of the Tax Code of the Republic of Armenia when calculating the company’s tax liabilities.
In the course of examining the case, the Court also reviewed and assessed Expert Opinion No. 28812409 dated October 20, 2024, issued by the State Non-Commercial Organization “Expert Center of the Republic of Armenia.”
Agreeing with the objections and legal arguments presented by the attorney, the Court found that the tax authority had incorrectly interpreted and applied the provisions of the Tax Code of the Republic of Armenia by failing to apply the rules governing the indirect assessment of tax liabilities under Article 351 of the Code when calculating the company’s tax obligations.
In particular, the Court held that, given the absence or incompleteness of the company’s accounting records and the presence of unreliable data in its tax returns, the tax liabilities should have been determined using the indirect assessment method, in accordance with the rules established by Article 351 of the Tax Code of the Republic of Armenia.
The Court also agreed with the argument that the tax authority had failed to identify factual circumstances favorable to the taxpayer and, as a result of its incomplete administrative examination, had reached inaccurate conclusions.
The judgment also addressed the legal significance of information obtained from the authority conducting the criminal proceedings and its use during the tax audit. The Court emphasized that such information does not, in itself, have a binding prejudicial effect, and that its disclosure to the tax authority does not relieve the latter of its obligation to duly verify the relevant circumstances in the course of exercising tax control.
Thus, having assessed the evidence presented in the case and the legal arguments advanced by the attorney, the Court concluded that the contested SRC report had been issued as a result of the incorrect interpretation and application of the law and that sufficient legal grounds therefore existed to declare it invalid.
Consequently, by its judgment of October 29, 2026, the Administrative Court of the Republic of Armenia upheld the company’s claim and invalidated in its entirety Tax Audit Report No. 3008214 dated September 3, 2024, issued by the State Revenue Committee of the Republic of Armenia, which had imposed additional tax liabilities of approximately AMD 2.9 billion on the company.
