The headline rate of corporate profit tax in Armenia is 20% for resident companies, and, depending on the type of the taxable income, 0-20% for non-residents. The law on Profit tax provides tax benefits (5% and 2%) for major exporters that deal exclusively in export, if the cost of exported goods exceeds 40 billion and 50 billion AMD, respectively. Resident taxpayers that perform construction and installation works and operate exclusively abroad are taxed at the rate of 5%. The tax rates are the same for both distributed and retained profits.
The tax period of corporate profit tax is one calendar year. The payment of tax to the budget is provided by using advance payments based on profit tax of the previous year. These payments are to be made every three months, but no later than the 15-th day of the last month of the quarter. The final payment is to be made no later than April 25 of the year following the reporting year.
Profit tax is determined based on rules and principles of accounting defined by the law or other legal acts. The taxpayers have to notify the tax agency about their chosen accounting and financial reporting principles and rules, as well as the accounting computer program they use if the law or other legal acts grant them the right to choose.
As there are no tax grouping rules in Armenia, each company pays its own taxes, and there’s no tax relief for losses of overseas subsidiaries. Except for the reorganization cases of accession, merger, and restructuring, tax losses provided by the law survive a change of ownership and can be transferred to the 5 years following the year the loss incurred.