Ձեր օտարերկրյա ծնողին Հայաստանից վճարելը. դիվիդենդ, ծառայության վճար, հոնորար, թե՞ փոխհատուցում: Ի՞նչ պետք է նախ ստուգի ֆինանսիստը:

An Armenian LLC paying its foreign parent withholds 5% on a dividend, 10% on interest or royalties and 20% on most Armenian-source service fees, before treaty relief, and the obligation applies whether the money moves by bank transfer or by offsetting balances. Which rate applies depends on what the payment legally is, and a dividend also needs corporate approval before anything leaves the company.

Step 1: Decide what the payment legally is

The Tax Code sets one withholding rate per category of income, so the first check is the category. The rates below are the domestic starting points for a non-resident company with no Armenian permanent establishment.

A service performed entirely abroad can still be Armenian-source. Under the Tax Code’s source rules, the listed professional services count as Armenian-source when supplied to an Armenian resident organisation, and an amendment in force from 1 July 2026 (HO-234-N) extended the recipient wording to Armenian-registered individual entrepreneurs and Armenian permanent establishments of non-residents. “Our parent did all the work in London” does not on its own take a management fee outside the 20% rate.

Withholding attaches only to amounts that are taxable income of the parent. Repaying an advance the parent made on the subsidiary’s behalf, for example, is a different question from paying the parent a fee.

Step 2: Make the contract and the accounts match the label

The category follows the substance of what the parent supplies. A “management fee” that in fact pays for the right to use group software is a royalty at 10%, and a “royalty” for staff the parent seconds to run Armenian operations looks like a service fee at 20%. Armenia’s Tax Code has no general anti-avoidance rule, but the State Revenue Committee can reprice related-party transactions to arm’s length under the transfer pricing chapter (Arts. 362-364), and it does so from the documents.

Before payment, finance should hold:

1. A signed intercompany agreement that describes what is supplied and how the charge is calculated.
2. An invoice from the group entity that actually earned the income.
3. Evidence the service was received or the licence used: reports, deliverables, user lists.
4. A ledger entry booked under the same category as the contract.

Step 3: Corporate approval before any distribution

Only the participants can distribute profit. Under the LLC Law (Art. 24(1) and Art. 36(2)) the decision belongs to the general meeting; in a single-member LLC the sole participant takes it by written decision. A director’s payment instruction does not replace it. Profit is allocated in proportion to each participant’s share of charter capital.

Distributions are allowed no more than once per quarter. The older “once a year” wording was replaced by HO-288-N, in force from 15 October 2023. The law does not say whether a quarter means a calendar quarter or any three-month period, so planning distributions around calendar quarters avoids the question. Once the decision is taken, the dividend must be paid within one year (Art. 24(4)).

Art. 25 bars both adopting a distribution decision and paying an already-approved dividend where:

• the company’s charter capital is not fully paid;
• net assets are below charter capital plus the reserve fund, or would fall below it as a result of the distribution;
• another law prohibits the distribution.

Whether the net-assets condition must be met again on the payment date, and not only on the decision date, is not settled by the text. Re-check net assets before paying a dividend approved months earlier. The LLC Law attaches no specific fine to paying without a valid decision, and the route for recovering such a payment has not been established.

The decision also matters for tax. Art. 132(2) lists the adoption of the distribution decision among the events that count as payment, alongside the transfer itself. The tax is withheld at the first of these events, once, and the quarter of that event sets the reporting and payment deadline.

Step 4: Withhold, report, and support any treaty rate

The Armenian subsidiary is the tax agent. It calculates the tax on the gross amount, files the quarterly tax agent report by the 20th of the month after the quarter (Art. 134(2)) and pays the tax by the same date for the quarter in which the payment event occurred (Art. 136(2)). Tax is paid in AMD (Art. 18(3)), whatever currency the parent is paid in; see our note on foreign currency conversion rules.

Armenia has 53 double tax treaties in force. The payer can apply a lower treaty rate at source, and the quarterly report form (SRC Order 326-N) has a section for income paid exempt or at a reduced treaty rate. The file behind that line should contain:

• a tax residence certificate issued by the parent’s home authority for the legal person that is entitled to the income, covering the year of payment;
• evidence that this entity is the beneficial owner of the dividend, interest or royalty, which treaties require separately from residence;
• the contract, invoice and the recipient named in the report, all showing the same entity.

A certificate for a sister company or the group’s ultimate parent does not support relief on income earned by a different entity. Different invoicing and operating entities do not by themselves defeat relief, provided the paper trail shows which one earns the income. The Tax Code does not define beneficial owner, and no Armenian rule prescribes the form of beneficial-ownership evidence, the certificate’s validity period or apostille and translation requirements.

A parent in the United States gets no treaty relief. Armenia does not recognise the 1973 US-USSR convention as applying to it, so domestic rates apply in full. For structures that route income through a treaty jurisdiction, see Armenian holding companies and withholding tax reduction.

Set-offs, non-cash payment and debt renewal

Art. 132(2) defines payment for withholding broadly. It covers cash and non-cash monetary payments, including partial ones; settlement with other property; mutual set-off of receivables and payables; and the re-documentation or renewal of a debt. Each of these triggers withholding on taxable income as if money had been wired.

Example: the subsidiary owes its parent 100 in royalties, and the parent owes the subsidiary 80 for recharged costs. The two agree to set off 80 and the subsidiary wires 20. Withholding is due on the full 100, so 10 at the 10% royalty rate, and must be paid to the budget in AMD. Computing it on the 20 that crossed the bank leaves 8 unpaid.

The same applies to a dividend settled by offset against a parent receivable. The offset can cover only the net 95%; the 5% withheld has to reach the budget as an actual payment, because a journal entry cannot pay tax.

The set-off itself must be valid under the Civil Code. Art. 426 allows it for reciprocal claims of the same kind that are due, and a declaration by one party is enough; Art. 427 lists the claims that cannot be set off, and a participant’s obligation to pay in charter capital cannot be discharged by set-off. Keep the signed set-off declaration with the payment file: its date fixes the quarter of the payment event.

No SRC guidance or court decision settles whether extending a loan’s maturity, or capitalising accrued interest into principal, is a renewal of the debt under Art. 132(2). Any amendment to an intra-group loan should be drafted with that question in view.

The UK-Armenia treaty and the principal purpose test

The 2011 UK-Armenia convention caps Armenian tax on payments to a UK resident:

• Dividends: 5% to a company holding at least 25% of the capital and having invested at least GBP 1 million; 10% in other cases; 15% on distributions by certain property investment vehicles; 0% to a qualifying pension scheme.
• Interest: 5%.
• Royalties: 5%.

A treaty ceiling never raises a lower domestic rate. An ordinary dividend from an Armenian LLC is already taxed at 5%, so a UK parent does not need to meet the 25% and GBP 1 million test for that rate. The treaty matters for royalties and interest, where it halves the 10% domestic rate, and for service fees: a UK company with no permanent establishment in Armenia can rely on the business profits article against the domestic 20%.

The Multilateral Instrument entered into force for Armenia on 1 January 2024 and modifies the UK treaty for withholding taxes from that date. Its principal purpose test denies a treaty benefit where obtaining it was one of the principal purposes of the arrangement or transaction, unless granting it is in line with the treaty’s object and purpose. A UK company that is resident and holds a certificate can still lose the reduced rate if it was placed in the chain to obtain it. The same test applies under Armenia’s other treaties modified by the MLI, and five of its treaties (Czech Republic, India, Israel, Slovak Republic, Sweden) carry their own limitation-on-benefits clauses.

For a UK parent, the file for a reduced rate is therefore the HMRC certificate of residence for the company that earns the income, evidence of beneficial ownership, and a business reason for the structure that does not depend on the Armenian tax saving. Our Հայկական հարկային պրակտիկա reviews these files before the first payment, and groups setting up a new subsidiary can build the intercompany agreements in at ընկերության գրանցում.

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