+374 10 575121 info@dialog.am

Anti-cafe Taxation Issue: Fixed Tax or Turnover Tax

One of the cases  of  “Concern Dialog" law firm that can serve as a benchmark  for the similar cases came to its end.


“Aeon” LLC owns an anti-cafe which aims to provide entertainment for customers, organization of various events, creating a platform for discussion of various topics. Customers pay for the time passed there. There are some sweets and coffee in the area for which the customer does not pay.


On October 8th, 2015 the tax authority prepared an inspection act No. 6115295, which stated that anti-cafe was engaged in the public food consumption organization, therefore, it is considered as  fixed tax payer and should  have made the appropriate announcement  about the initial data and changing ratios. This decision was appealed to the Administrative Court. The submitted case presented "Concern Dialog" law firm Senior Associate, Mr.  Rustam Badasyan.


Court decision stated that anti-cafe activity could not be considered as public food consumption organization based only on the fact that there was some coffee and sweets in the area. In particular, the court said. "Administrative body, adopting the administrative act, while bearing the burden of proof regarding the facts which justified the act, failed to provide any solid evidence to the Court proving that the company realized the culinary consumption of the product ..."


Thus, there was established a mechanism for the favorable taxation of anti-café the activities, that are subject to taxation on turnover tax. It is worth mentioning that the decision has not yet came into force.


You can find the detailed lawsuit here (Text in Armenian)