TL;DR
- From 1 January 2025, Armenian companies and individual entrepreneurs on the turnover-tax regime pay 1% on income from government-listed high-tech activities, through 31 December 2031.
- The 1% rate does not require a High-Tech Registry entry or a 90% high-tech revenue share. Those conditions, together with having no overdue tax, belong to the separate cash wage support scheme.
- The ordinary turnover-tax rules apply: annual turnover below AMD 115 million, a timely election of the regime (ordinarily by 20 February, or within 20 days of registration for a new business), and no Article 254 exclusion.
- The cash wage support is claimed separately, through a government portal within 20 days after each quarter ends; its procedures and platform were approved on 17 April 2025.
- Complementary incentives under the general tax regime include reduced 10% income tax for R&D staff (with commission approval) and a 200% salary deduction for IT specialists.
Last updated September 2026
Armenia has locked in a startup-friendly tax regime for the tech sector: a 1% turnover tax that simplifies compliance and stretches runway for early-stage teams. With the country’s IT turnover already surging — 837 billion AMD in 2023 and continued double-digit growth into 2025 — the regime is designed to channel that momentum into jobs and innovation.
Legislative framework
Armenia’s 1% turnover tax for the high-tech sector was introduced by amendments to the Tax Code adopted on 4 December 2024, alongside a separate Law on State Support to the High-Tech Industry. The two work independently: the Tax Code sets the 1% rate for turnover taxpayers on income from listed high-tech activities, while the state support law creates the High-Tech Registry and a cash wage support scheme with its own, stricter conditions.
The list of qualifying high-tech activities is set by Government Decision 142-N (13 February 2025). Implementation procedures for the wage support — including a self-service application platform and quarterly submission windows — were approved by the Government on 17 April 2025.
| At a glance | Key point |
|---|---|
| Legal basis | Tax Code amendments (1% rate) + Law on State Support to the High-Tech Industry (Registry and wage support); qualifying activities listed in GD 142-N |
| Administration | 1% rate: turnover-tax election with the State Revenue Committee. Wage support: High-Tech Registry + quarterly applications via government portal |
Related reading: If you are setting up a new entity to access the regime, see our guide to business registration in Armenia. For broad fiscal considerations, review Armenia’s taxes and compliance overview.
Timeline and sunset for the 1% turnover regime
The 1% turnover tax applies to qualifying revenue earned from 1 January 2025 and is legislated to remain in force through 31 December 2031, providing a clear multi-year planning horizon for startups and investors.
There is no separate application for the 1% rate: a business that has elected the turnover-tax regime applies it to income from listed high-tech activities. The quarterly portal filings described below relate only to the cash wage support.
What the 1% turnover tax covers: rate
Turnover taxpayers are taxed at a 1% rate on income from qualifying high-tech activities, instead of paying profit-based corporate income tax on that income.
Note on complementary incentives: Additional employment incentives (10% income tax for R&D staff, 200% salary deduction for IT specialists) apply only under the general tax regime, not the turnover tax regime. Most small IT companies use the 1% turnover tax and don’t access these deductions.
Taxable base and scope
The taxable base is gross turnover — revenue without expense deductions — from activities on the Government’s list under Decision 142-N, such as software development, specified computer consultancy, systems management, software publishing and certain data and web-portal activities.
Important: Only revenue from qualifying high-tech activities is taxed at 1%. Income from other activities is taxed at the turnover-tax rate that applies to that activity. There is no minimum high-tech share for the 1% rate itself.
Eligibility rules: qualifying activities
To use the 1% turnover tax, a resident company or registered individual entrepreneur must:
- Earn the income from an activity on the Government’s high-tech list (Decision 142-N).
- Be on the turnover-tax regime, having elected it on time (ordinarily by 20 February, or within 20 days of registration for a newly registered business).
- Keep annual turnover below AMD 115 million.
- Not fall within an Article 254 exclusion — for example excluded business types such as banks, insurance, legal services, accounting and management consultancy, and certain related-party and contractual arrangements.
High-Tech Registry entry, the 90% high-tech revenue share and having no overdue tax are not conditions of the 1% rate. They apply to the separate cash wage support (see below).
Quick eligibility checklist for the 1% rate
- ☐ Income from a listed high-tech activity?
- ☐ Turnover-tax regime elected on time?
- ☐ Annual turnover under AMD 115 million?
- ☐ Not an excluded business type?
- ☐ No disqualifying related-party or contractual arrangements?
Revenue thresholds (AMD 115M) and exclusion conditions
The 1% turnover regime is limited to businesses with annual turnover below AMD 115 million (approximately $300,000). If a company exceeds this cap, it exits the preferential regime.
Important: If you exceed the threshold in 2025, you cannot return to turnover tax in 2026. You can only return in 2027, provided your 2026 turnover was below AMD 115 million. There is a mandatory gap year.
Key disqualifiers for the 1% rate include:
- Exceeding the AMD 115M turnover ceiling
- Being a related party to entities with combined turnover exceeding AMD 115M
- Engaging in excluded activities (legal, accounting, consulting services)
- Missing the turnover-tax election deadline
High-Tech Registry and the cash wage support
The Law on State Support to the High-Tech Industry establishes a High-Tech Registry and a cash wage support scheme. Registration in the Registry is needed for the wage support; it is not a condition of the 1% turnover-tax rate. To qualify for the wage support, at least 90% of sales must come from listed high-tech activities and the business must have no overdue tax liabilities. Falling below the 90% share ends the wage support but does not by itself affect the 1% rate.
On 17 April 2025, the Government approved procedures and a self-service digital platform to manage applications, quarterly submissions, and approvals under the support program, including mechanisms to validate projects (such as R&D) and monitor continued eligibility.
If you are forming a new company to enroll, our team can assist with end-to-end Armenia business registration and ongoing tax compliance.
How to use the 1% rate, and how to claim the wage support
For the 1% rate:
- Confirm your activities are on the Decision 142-N list and that expected turnover stays below AMD 115M.
- Check the Article 254 exclusions, including related-party and contractual arrangements.
- Elect the turnover-tax regime on time — ordinarily by 20 February, or within 20 days of registration for a new business.
- Apply 1% to qualifying income in your ordinary turnover-tax returns, keeping records that show which income comes from listed activities.
For the cash wage support (optional, separate):
- Check the extra conditions: at least 90% of sales from listed high-tech activities and no overdue tax liabilities.
- Register in the High-Tech Registry: create an account on the self-service platform and submit your initial registration dossier.
- File quarterly applications: submit support requests within 20 days after each quarter’s end through the portal.
- Await government decision: approvals are issued via the platform under the approved procedures; maintain compliance documentation for monitoring.
| Item | Timeline / Threshold |
|---|---|
| Program start | 1 January 2025 |
| Program sunset | 31 December 2031 |
| Turnover cap (1% rate) | AMD 115,000,000 annual |
| Turnover-tax election (1% rate) | Ordinarily by 20 February; within 20 days of registration for a new business |
| Activity mix | 1% rate: no minimum share. Wage support: ≥90% qualifying high-tech sales |
| Wage support filing window | Within 20 days after quarter end |
Considering moving founders or key staff to Armenia to benefit from the program? Explore visa and residency options alongside our investment support.
Conclusion
Armenia’s 1 percent turnover tax for tech startups offers a clear, low-friction path to operate and scale in a cost-effective jurisdiction, with predictable benefits through 2031. If your activities are on the Government’s list and your turnover stays under AMD 115M, the regime can materially extend runway and simplify compliance.
Have questions about eligibility, registration, or structuring your Armenian operations? Contact our tech and tax team for tailored advice.
For comprehensive support with business registration, tax compliance, and corporate structuring in Armenia, visit our Business Registration Services page.
FAQ
When did Armenia’s 1% turnover tax for tech take effect, and how long does it last?
It applies to qualifying revenue starting 1 January 2025 and is legislated to remain in force through 31 December 2031.
What is the turnover cap for the 1% regime?
Annual turnover must be below AMD 115 million. Exceeding the cap disqualifies you from the preferential regime, and you must skip one full year before you can return.
What are the core eligibility rules for tech startups?
For the 1% rate you must be on the turnover-tax regime (elected on time), derive the income from an activity on the Government’s high-tech list, stay below AMD 115 million turnover, and not fall within an Article 254 exclusion. There is no minimum high-tech share and no Registry requirement for the 1% rate. The 90% sales test, the no-overdue-tax condition and High-Tech Registry entry apply only to the separate cash wage support under the Law on State Support to the High-Tech Industry.
Do individual entrepreneurs (sole proprietors) qualify, or only companies?
Both resident commercial companies and registered individual entrepreneurs can use the 1% rate if they meet the turnover-tax conditions. Both can also apply for the separate wage support, subject to its own conditions and Registry requirements.
Do I need to apply each quarter?
Not for the 1% rate, which you apply in your ordinary turnover-tax returns once the regime is elected. Quarterly applications — filed through the government’s self-service portal within 20 days after each quarter ends, under procedures approved on 17 April 2025 — are only for the cash wage support.
What happens if I exceed the AMD 115M threshold?
You exit the turnover tax regime and must switch to the general system (18% CIT + 20% VAT). You cannot return to turnover tax the following year — you must wait one full year, then reapply if that year’s revenue was under the threshold.
