ARMENIA Law and Practice Contributed by: Narine Beglaryan, Arianna Adamyan and Anahit Aloyan, Concern Dialog
The aircraft registered in Armenia and sold abroad may be deregistered from the Armenian register. The list of documents is determined subject to submission to the Civil Aviation Committee in order to register or deregister an aircraft. No requirement for prior consent of the Civil Aviation Committee is established. Government consent may be required as a prerequi - site to the execution of a bill of sale if the transaction involves the transfer of an ownership interest in an entity (rather than the aircraft itself), and such trans - action results in a concentration subject to declara - tion to the Competition Protection Commission of the Republic of Armenia (CPC). In such a case, the CPC will assess the concentration and either approve or prohibit it. The concentration assessment process is initiated by submitting an application and notification in the prescribed form. 1.2.5 Taxes/Duties Payable Upon Execution of a Bill of Sale Under the Armenian Tax Code, there are no special provisions regarding the sale of shares in an Armenian company based on whether the entity owns an aircraft or not. The following rules apply: Resident Legal Entities For resident legal persons, income derived from the alienation (sale or transfer) of shares, interests, or units in another organisation is not subject to profit tax, pro - vided the alienation occurs after two full tax years fol - lowing the tax year in which the shares, interests, or units were acquired. Non-Resident Legal Entities Non-resident legal entities are subject to a profit tax of 18% on capital gains from the sale of shares, inter - ests, or units in another organisation. Individuals Income obtained from selling or exchanging shares, interests, units, or other securities representing invest - ments in the authorised capital of an organisation is generally considered to be non-taxable income. However, this exemption does not apply if the income is derived from the alienation of shares, interests, or other securities representing an investment in real
estate – such as a building, apartment, mansion, or other structure (including unfinished or partially con - structed property) – and the alienation occurs within the same tax year as the acquisition or within the three tax years following the acquisition of such shares or interests.
2. Aircraft and Engine Leasing 2.1 Overview 2.1.1 Non-Permissible Leases
There are no express limitations under Armenian law based on the type of lease. In general, operating leas - es, wet leases, finance leases, and leases concerning only engines or parts are permissible and recognised. However, it is worth noting that due to the absence of aircraft manufacturing in Armenia, the demand for aircraft lease agreements is limited. As a result, there is no well-established market practice for entering into aircraft lease agreements; instead, parties commonly conclude bank loan arrangements or tenancy agree - ments. Under the Armenian Civil Code, operating and finance leases may be structured to provide that the leased property either transfers into the ownership of the lessee upon or after the expiry of the lease term, or remains with the lessor. Wet leases are comparable to contracts on the rent of transportation means with crew (time charter), as regulated by the Armenian Civil Code. Additionally, the Civil Code provides for a separate type of contract for the rent of transporta - tion means without the provision of management and technical operation services. 2.1.2 Application of Foreign Laws As a matter of general rule, a lease involving a domes - tic party can be governed by a foreign law. Parties to a contract may not exclude or alter the applicability of Armenian public law, including currency regulations, taxes, and rules related to the registration and opera - tion of an aircraft.
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