Taxes in Armenia: Complete Guide for Foreigners (2026)

Last updated: March 2026 · No gift, inheritance, or wealth tax · *0% on securities & individual-to-individual property sales; 10–20% when selling real estate to a legal entity

Which Profile Fits You?

Armenia’s tax system treats different types of businesses differently. Find your situation below for a quick summary of what applies to you, then read the detailed sections for the full picture.

Do You Owe Armenian Tax?

Before diving into rates and regimes, the threshold question for any foreigner is whether Armenia will tax you at all. The answer depends on your tax residency status, which is entirely separate from your immigration status (residence permit).

You are considered a tax resident of Armenia if you spend 183 or more days in the country during a calendar year. Days can be consecutive or non-consecutive; brief departures do not reset the counter. Alternatively, you may qualify earlier if Armenia is your “center of vital interests” — meaning your family, primary residence, business, and main economic activities are centered here.

Why this matters: Tax residents are subject to Armenian tax on worldwide income — salary, business income, dividends, and other earnings regardless of where they originate. Non-residents pay Armenian tax only on Armenian-source income. Getting this distinction right before you set up any business structure is critical.

Tax Residency Certificate

The State Revenue Committee issues tax residency certificates upon request through Armenia’s e-platform. This certificate proves your status to foreign tax authorities and is essential for claiming treaty benefits. Private Entrepreneurs can obtain a certificate automatically.

Double Tax Treaties

Armenia has 51 double tax treaties in force, including agreements with most European countries, Canada, Australia, China, the UAE, and recently Japan (effective 2026) and Hong Kong (effective April 2025). These treaties generally prevent you from paying tax on the same income in two jurisdictions by allocating taxing rights and providing credit mechanisms.

US-Armenia Treaty Complexity: The United States considers the 1973 US-USSR treaty to apply to Armenia, but Armenia does not officially recognize it. In practice, US taxpayers cannot rely on treaty benefits in Armenia and should instead use the US Foreign Tax Credit to avoid double taxation. If you are a US citizen or green card holder, consult a cross-border tax advisor.

Corporate Income Tax

Armenia’s corporate income tax (CIT) rate is 18% on net profit. Tax residents are subject to tax on worldwide income; non-residents pay tax only on Armenian-source income. The tax year follows the calendar year (January 1–December 31).

Companies must make monthly advance income tax payments based on the prior year’s profit. These payments are credited against the annual tax liability, which is finalized when you submit your annual financial statements and tax return to the State Revenue Committee.

Value-Added Tax (VAT) is levied at 20% on most goods and services supplied in Armenia. Exports are zero-rated (0% VAT). VAT registration becomes mandatory once your annual turnover exceeds AMD 115,000,000 (~USD 291,000). Once registered, you must file monthly VAT returns and remit any balance due to the State Revenue Committee.

Special Tax Regimes for Small Businesses

Armenia offers several simplified tax regimes designed to reduce compliance burden for small and medium enterprises. These are optional, but can result in significant tax savings if your business qualifies.

Turnover Tax (General SME Regime)

The turnover tax regime simplifies taxation for small businesses by replacing both corporate income tax and VAT with a single tax on revenue. You must elect this regime by February 20 each year, or within 20 days of registration if you are a new entity.

Eligibility: Annual sales must not exceed AMD 115,000,000 (~USD 291,000). The tax rate varies by business activity and ranges from 1% to 12%. The standard commercial (trade) rate is 10% (increased from 5% in 2025). Other rates include 7% for production, 12% for public catering, and 1% for qualifying high-tech companies.

Expense deductions: Since 2025, turnover taxpayers can deduct a percentage of documented expenses from their tax liability. For trade: 9.5% of purchasing costs (minimum effective floor of 1% of turnover). For production: 5% (floor 3%). For catering: 9% (floor 3.5%). For other activities: 6% (floor 4.5%). Unused deductions can be carried forward.

Important: If your turnover exceeds the threshold during the tax year, you remain in the regime until December 31. However, you must skip one full calendar year before becoming eligible to return to the turnover tax regime.

IT Company 1% Regime (2025–2031)

Qualifying information technology companies can elect a preferential 1% turnover tax through December 31, 2031. This is one of Armenia’s most attractive tax incentives and applies to gross revenue.

Requirements:

• Registered in the Armenian High-Tech Registry
• At least 90% of annual revenue derived from qualifying IT activities
• No overdue tax liabilities
• Election must be made by February 20 each year (or within 20 days of registration for new companies)

Qualifying IT Activities: Software development and programming, IT consulting and support, data processing and analytics, cloud hosting and infrastructure services, artificial intelligence and machine learning, web platforms and e-commerce systems, electronic circuit design, scientific research and development, systems integration, and similar high-tech services.

Excluded Activities: Legal services, accounting, management consultancy, banking and finance, gambling, and other non-technical services.

Alternative IT Incentives (2025–2031)

Companies that do not elect the 1% turnover tax can instead claim alternative salary-based incentives under the general regime. These two approaches are mutually exclusive — you must choose one:

• 10% PIT on R&D staff salaries (instead of the standard 20%)
• 200% salary deduction for IT specialists when calculating corporate income tax
• 60% PIT reimbursement for newly hired employees (3-year limit; available until 2031 for foreign specialists)

For most small IT companies and freelancers, the 1% turnover tax is simpler and more beneficial. The alternative incentives tend to favor larger companies with substantial payroll costs and R&D teams.

Micro-Business Regime (0% Tax)

Armenia offers a 0% tax regime for micro-businesses with annual sales not exceeding AMD 24,000,000 (~USD 61,000). However, this is limited to specific activities.

Available for: Manufacturing, hospitality and accommodation, educational services, digital content creation, certain retail trade (outside Yerevan and shopping malls), artisan activities, and other approved activities.

NOT available for (since July 2025): Consulting (management, engineering, marketing), legal services, accounting and audit, IT and data processing, advertising, translation, medicine, dentistry, and most professional B2B services.

Check with a local accountant to confirm whether your specific business activity qualifies before electing this regime.

Which Tax Regime Fits Your Business?

Answer these questions to find your likely regime. Then confirm with a tax advisor.

Tax Regime Comparison

Personal Income Tax and Payroll Obligations

Whether you operate as an individual, a private entrepreneur, or employ staff, Armenia’s payroll and personal income tax system is straightforward but has several moving parts.

Personal Income Tax (PIT)

Armenia applies a flat 20% personal income tax on all forms of compensation — salary, bonuses, commissions, fees, and other earned income. This applies to both residents and non-residents earning Armenian-source income.

Social Security Contributions

Employees must contribute to Armenia’s social security system. The rate is 5% on income up to AMD 500,000 per month, and 10% on income exceeding that threshold, capped at AMD 87,500 per month.

Note: Individuals born before January 1, 1974, are exempt from social pension contributions.

Stamp Duty (Professional Tax)

Employees pay a monthly stamp duty (military fee) of AMD 1,000 (salary up to AMD 1,000,000) or AMD 15,000 (salary above AMD 1,000,000). These reduced rates took effect in December 2025, replacing the previous four-tier structure.

For Private Entrepreneurs (PEs), the annual stamp duty is AMD 12,000 (if annual income ≤AMD 12M) or AMD 120,000 (if annual income >AMD 12M). These rates were reduced effective January 2026.

Health Insurance (Effective January 2026)

Armenia introduced mandatory health insurance effective January 1, 2026. This is a new and important obligation.

For Employees:

• Not applicable if gross salary ≤AMD 200,000 (exempt in Phase 1)
• AMD 4,800 per month (if gross salary AMD 200,001–500,000)
• AMD 10,800 per month (if gross salary >AMD 500,000)

Note: Employees earning ≤AMD 200,000 are scheduled for integration into the system on January 1, 2027.

For Private Entrepreneurs: AMD 129,600 annually, due by April 20 each year. This applies to PEs whose 2025 income was AMD 2,400,001 or more. Note: Private health insurance does NOT exempt you from the mandatory payment.

Dividend Withholding Tax

Dividends paid by Armenian companies to shareholders are subject to a 5% withholding tax. The company withholds and remits this tax to the State Revenue Committee.

Withholding Tax on Non-Resident Payments

Payments to non-residents for Armenian-source services (consulting, contracting, licensing) are subject to a 20% withholding tax. The payer must withhold and remit this to the tax authorities. This rate may be reduced under applicable double tax treaties.

What Does Hiring in Armenia Actually Cost? (2026)

Employers pay only the gross salary amount — there is no additional employer social security contribution. You withhold and remit employee deductions by the 20th of the following month. Here is the breakdown at three common salary levels:

Assumes employee born on or after January 1, 1974. Health insurance rates effective January 2026. Employer pays only the gross amount — no additional employer-side social taxes.

Tax Obligations for Private Entrepreneurs

If you operate as a Private Entrepreneur (PE) on a simplified tax regime, you face both fixed monthly obligations and annual obligations. These apply regardless of whether you earn a profit.

Monthly Obligations

• Income Tax: AMD 5,000 (turnover tax regime only)
• Social Contribution: AMD 5,000

Total Monthly: AMD 10,000 (~USD 25)

Annual Obligations

• Stamp Duty: AMD 12,000 (income ≤AMD 12M) or AMD 120,000 (income >AMD 12M)
• Health Insurance: AMD 129,600 (due by April 20; applies if 2025 income ≥AMD 2,400,001)

Total Annual Minimum (small PE): AMD 10,000 × 12 + AMD 12,000 + AMD 129,600 = AMD 261,600 (~USD 662)

Import Taxes and Customs Duties

If your business involves importing goods into Armenia, you will encounter both VAT and customs duties. Armenia is a member of the Eurasian Economic Union (EAEU), which significantly simplifies intra-union trade.

VAT on Imports: Goods imported into Armenia are generally subject to 20% VAT. However, exports from Armenia are zero-rated, meaning you can reclaim any VAT paid on inputs and exports leave with no VAT.

EAEU Member Benefits: Goods imported from fellow EAEU members (Russia, Belarus, Kazakhstan, Kyrgyzstan) are generally exempt from customs duties. Certain machinery, raw materials, and agricultural goods may qualify for reduced or zero duties even from non-member countries, depending on bilateral agreements.

Keep detailed import documentation and invoices. Our team can advise on duty classification and help you structure imports efficiently.

What Armenia Doesn’t Tax

Armenia’s tax code has some significant exclusions that can work strongly in your favor.

Capital Gains: Individuals pay 0% capital gains tax on securities (shares, bonds, government bonds) and on property sold to other individuals. However, when real estate is sold to a legal entity (company), a withholding tax applies: 10% on residential property and 20% on commercial property. For investors holding securities, Armenia remains one of the most favorable jurisdictions in the region.

Gifts and Inheritance: Gifts received during your lifetime and inheritances from family members are not subject to tax in Armenia. This applies to both residents and non-residents inheriting Armenian property.

No Wealth or Net Worth Tax: Armenia does not impose a wealth tax, net worth tax, or annual asset tax. Your total accumulated assets are not taxed simply because you own them.

These exemptions make Armenia an attractive jurisdiction for investors and entrepreneurs looking to manage wealth efficiently over the long term.

Cross-Border Tax Considerations

For relocators and foreigners operating businesses in Armenia, understanding how Armenian tax interacts with your home country’s rules is often more important than understanding Armenian tax itself.

CRS/AEOI Automatic Data Exchange

Armenia participates in the Common Reporting Standard (CRS) and began automatic exchange of financial account information with 47+ countries in 2025. This means your Armenian bank account balances and transaction data may be shared with your home country’s tax authority. For Russian, Ukrainian, and European nationals, this creates real compliance obligations: your home-country tax authority will know about your Armenian accounts.

Home-Country CFC and Tax Residency Rules

If you retain tax residency in your home country (or fail to formally exit it), your home country may apply Controlled Foreign Corporation (CFC) rules to your Armenian business income. This is particularly relevant for Russian nationals who relocated to Armenia but did not formally terminate Russian tax residency — Russia’s CFC rules can require reporting and taxation of Armenian PE or LLC profits.

Practical Advice

Armenia can solve your Armenian compliance, but not necessarily your home-country filing. We strongly recommend:

• Formally assessing your tax residency status in both Armenia and your home country
• Understanding whether your home country has CFC rules that apply to your Armenian entity
• Filing a tax residency certificate in Armenia if you qualify, as this is essential for treaty benefits
• Working with advisors in both jurisdictions for the first year of relocation

Common Mistakes Foreigners Make

After handling 1,500+ cases for clients from 97 countries, we see these errors repeatedly. Avoiding them can save you significant money and stress.

• Missing the February 20 regime election: If you don’t elect turnover tax or microbusiness by February 20, you are locked into the general regime (18% CIT + 20% VAT) for the entire year. For IT companies, this means paying 18% instead of 1%.
• Assuming all freelance work qualifies for simplified regimes: Consulting, advisory, legal, and accounting services are generally excluded from both turnover tax and microbusiness regimes. Many foreign freelancers register under the wrong regime and face reclassification.
• Ignoring tax residency consequences: Staying 183+ days in Armenia makes you a tax resident, subject to worldwide income tax. Many relocators don’t realize this until their first annual declaration.
• Forgetting home-country obligations: Armenian compliance does not replace your home-country filing requirements. CFC rules, exit taxes, and CRS data exchange mean your home country may still have claims on your income.
• Letting a PE or LLC go dormant without planning: While dormant status is a legitimate option (no taxes, no filings), immigration authorities view tax payments as primary evidence of genuine business operations. Going dormant can affect your residence permit renewal.

If you have already made one of these mistakes, it is not too late to fix it. We regularly help clients restructure, correct filings, and resolve compliance issues. Contact us for a cleanup assessment.

Getting Started: Registration and Compliance

Setting up your tax position in Armenia is straightforward if you work with experienced advisors. Here is what the process typically looks like.

Obtain Your Taxpayer ID (INN)

Every business and individual subject to Armenian tax must register and receive a Taxpayer ID (INN). You can obtain an INN remotely through a power of attorney without traveling to Armenia. Processing typically takes a few days. Once issued, your INN becomes your identifier for all future tax filings and payments.

Choose Your Tax Regime

Decide whether to operate under the general corporate income tax regime or elect a simplified regime (turnover tax, IT 1%, or micro-business). This election must be made at registration or during the February 20 annual election window.

Register for VAT (If Required)

If your projected turnover will exceed AMD 115,000,000 (~USD 291,000), you must register for VAT. VAT registration is mandatory; you cannot opt out.

Ongoing Compliance

Once registered, you will face regular filing obligations:

• Monthly filings: VAT returns (if VAT-registered), payroll PIT and social security remittances, advance income tax payments
• Quarterly filings: Turnover tax returns, CIT advance payments, certain statistical reports depending on your activity
• Annual filings: Corporate tax return, financial statements, personal income tax declaration (if applicable), and health insurance payments

All filings must be submitted in Armenian using specific formats set by the State Revenue Committee. Deadlines are strict, and late filings incur penalties.

Why Engage a Local Accountant

We strongly recommend working with an experienced local accountant. Armenian tax law changes annually, filing deadlines are firm, and the State Revenue Committee expects submissions in Armenian using precise formats. Errors or delays can trigger audits and penalties that also affect your immigration status.

Our team handles all of this for our clients — from initial tax registration to monthly filings, payroll processing, annual financial statements, and correspondence with the State Revenue Committee. You focus on your business; we manage the compliance.

Frequently Asked Questions

Related Services

Tax planning works best when integrated with your overall legal and regulatory framework in Armenia. We offer complementary services to support your business: