Taxes in Armenia 2017-01-30T13:26:27+04:00

Personal Taxation

Armenia offers favorable tax conditions for residents, which include:

  • No tax on dividends irrespective of the country of origin, the level of participation, and the nature of investment
  • No capital gains tax on the disposition of shares, irrespective of holding period
  • No gift/inheritance tax
  • No net worth tax
  • No tax on insurance payments from foreign sources
  • Interest, royalties and rent are taxed at 10%
  • Strong network of double tax treaties with 41 countries

For employees, payroll (24.4%-36%) and social security taxes (5%) are withheld by employers.

To be considered a resident, a foreigner is required to have lived in Armenia 183 days within a 12-month period.

Corporate Taxation

Armenia offers an attractive tax environment for companies, with:

  • Low statutory tax rates
  • Tax exemptions for small and medium enterprises
  • No tax on dividends irrespective of the country of origin, the level of participation and the nature of investment
  • No stamp/transfer tax on the sale of shares or real estate
  • No municipal business tax
  • No capital/net worth tax
  • A strong network of double tax treaties with 41 countries, including Russia, Cyprus, Luxembourg, Netherlands, UK, Ireland, UAE, etc.
  • No controlled foreign corporation (CFC) rules, including for offshore companies
  • No tax on branch remittances
  • Generous thin capitalization rules

Armenian companies are subject to corporate income tax at a flat rate of 20%. The tax applies to resident companies and to Armenian permanent establishments of foreign companies.

An optional tax regime (the “turnover tax” regime) is available for businesses with an annual turnover not exceeding $141,000 USD. There are no restrictions on the number of such businesses a non-resident can own. Turnover tax rates are 1% for trade, 3.5% for manufacturing and 5% for other activities.

Family owned and operated businesses with an annual turnover of less than US$30,000 are exempted from taxation.

In addition, Armenia offers specific tax regimes for free economic zones, companies listed on the stock exchange, and Government-approved business projects.

Companies incorporated in Armenia are considered residents and are taxable on their worldwide income, unless income is exempt under applicable tax treaties or domestic law. Capital gains are classed as additional income. Foreign corporate income tax may normally be offset against Armenian corporate income tax. In principle, the taxable basis is calculated on the basis of IFRS. Losses may be carried forward for 5 years. The thin capitalization rules disallow the deduction of interest payments to the extent they exceed 200% of the equity. No CFC rules apply in Armenia.

Non-resident taxpayers are liable to tax on their Armenian-sourced income, e.g. income realized by an Armenian permanent establishment. A withholding tax of 10% is levied on investment income, including dividends, interest, royalties and capital gains, unless tax treaties provide for lower rates.

 

Double Tax Treaties

Country

Dividends %

Interest %

Royalty %

Non-treaty

10

10

10

Austria

5-15

0-10

5

Belarus

10-15

10

10

Belgium

5-15

0-10

8

Bulgaria

5-10

5-10

5-10

Canada

5-15

10

10

China

5-10

10

10

Croatia

0-10

10

5

Czech Rep.

10

0-10

5-10

Cyprus

0-5

5

5

Estonia

5-15

10

10

Finland

5-15

5

5-10

France

5-15

0-10

5-10

Georgia

5-10

10

5

Germany

15

5

0

Greece

10

10

5

Hungary

5-10

10

5

India

10

10

10

Iran

10-15

10

5

Ireland

0-15

0-10

5

Italy

5-10

0-10

7

Kazakhstan

10

10

10

Kuwait

5

5

10

Latvia

5-15

10

10

Lebanon

5-10

8

5

Lithuania

5-15

10

10

Luxembourg

5-15

10

5

Moldova

5-15

10

10

Netherlands

0-15

0-5

5

Poland

10

5

10

Qatar

5-10

5

5

Romania

5-10

10

10

Russia

5-10

10

0

Slovenia

5-10

10

5

Spain

0-10

5

5-10

Switzerland

5-15

0-10

5

Syria

10

10

12

Thailand

10

10

15

Turkmenistan

5-15

10

10

Ukraine

5-15

10

0

UAE

3

0

5

UK

5-15

5

5