TL;DR
- From 2025 to 2031, Armenia offers a 1% turnover tax on government‑defined high‑tech activities, plus new R&D and payroll tax breaks to boost IT growth (KPMG; Library of Congress).
- Companies can deduct 200% of qualified R&D salaries from the profit tax base (capped at 50% of taxable income) (Schneider Group).
- Certified researchers enjoy a 10% personal income tax rate (down from 20%) (KPMG).
- Employers can recover 60% of wage income tax for new hires and qualifying labor migrants; 50% support applies to internationally certified training (Government press release).
- To qualify, firms must be in the High‑Tech Registry and earn 90%+ of revenue from high‑tech operations, with good tax compliance (Library of Congress).
Last updated 4 December 2025
Armenia is doubling down on its tech future. A new 2025–2031 framework slashes effective tax rates for eligible IT and high‑tech firms—freeing capital to hire, train, and scale. If you’re building or relocating an engineering team, these incentives can materially change your model and burn rate (KPMG; Government press release).
Table of contents
- Overview: Armenia’s 2025–2031 High‑Tech Support Framework
- Key tax incentives — 1% turnover tax and lowered corporate tax burden for eligible IT activities
- R&D and payroll tax benefits — 200% qualified R&D salary deduction and 10% PIT for certified researchers
- Wage subsidies, training grants and talent attraction — 60% wage tax reimbursement, training support and migrant-worker rules
- Eligibility, High‑Tech Registry and qualification thresholds (90% revenue rule and tax compliance)
Overview: Armenia’s 2025–2031 High‑Tech Support Framework
Effective 1 January 2025, Armenia’s new law and associated Tax Code amendments create a comprehensive package of tax preferences and wage supports for firms engaged in government‑defined high‑tech activities, running through 2031 (Library of Congress; KPMG).
The Government’s 17 April 2025 decision set out application procedures and definitions for wage subsidies and training support, operationalizing the program in 2025 (Government press release).
Policy tailwinds reflect a sector already scaling: Armenia’s IT services output reached AMD 142.2 billion in Q1 2025, with 24.5% year‑on‑year growth (Enterprise Armenia).
Considering an Armenian footprint? Align tax planning early with your business registration, visa and residency strategy, and model effective rates against Armenia’s general tax regime.
Key tax incentives — 1% turnover tax and lowered corporate tax burden for eligible IT activities
From 2025, revenue arising from government‑defined high‑tech activities may be subject to a 1% turnover tax, a sharp reduction versus standard profit taxation. For qualifying firms, this special regime substantially compresses effective rates and simplifies compliance (KPMG; EY).
- Scope: The 1% applies to revenue from activities classified as high‑tech by the Government; classification and eligibility are tied to the High‑Tech Registry (see Eligibility, below) (Library of Congress).
- Comparative burden: The 1% regime is designed to lower tax outlays versus the standard 18% corporate income tax base, improving cash flow for startups and scale‑ups (KPMG).
| Item | Standard regime | High‑Tech incentive |
|---|---|---|
| Tax on operating revenue | Profit tax (18% on taxable profit) | 1% turnover tax on defined high‑tech activities |
| Who can use | All taxpayers under general rules | Firms listed in the High‑Tech Registry and meeting activity criteria |
| Goal | Neutral corporate taxation | Reinvestment and growth in IT/high‑tech |
Tip: If you are weighing asset‑light service exports versus product R&D, model both the 1% turnover route and the R&D salary deduction (below) to optimize your structure (Schneider Group).
R&D and payroll tax benefits — 200% qualified R&D salary deduction and 10% PIT for certified researchers
Armenia pairs the turnover regime with targeted R&D incentives to deepen engineering capacity:
- 200% R&D salary deduction: Corporate income taxpayers in the high‑tech sector can deduct twice the amount of qualified R&D salaries, limited to 50% of taxable income. This effectively halves the profit tax burden attributable to eligible salary costs (Schneider Group).
- 10% PIT for certified researchers: Employees performing certified scientific research and experimental development are taxed at 10% personal income tax (down from 20%), increasing net pay and helping firms attract senior talent (KPMG).
Certification and qualifying activities are defined by the Government through sectoral rules; align job descriptions, contracts, and HR records to the recognized research roles to secure the 10% PIT treatment (KPMG).
Wage subsidies, training grants and talent attraction — 60% wage tax reimbursement, training support and migrant-worker rules
Beyond tax rates, Armenia subsidizes talent acquisition and upskilling in the high‑tech sector:
- New hires: Employers receive a 60% reimbursement of the income tax (PIT) withheld from salaries of newly hired high‑tech professionals, under official eligibility rules (Government press release).
- Labor migrants: Employers receive a 60% reimbursement of PIT on wages for qualifying “labor migrants” hired into high‑tech roles. A labor migrant is a foreign citizen or stateless person who had not worked in Armenia before March 1, 2022; dual citizens are excluded (Government press release).
- Training support: Employers may receive a 50% income‑tax support for employees who complete internationally certified training on recognized platforms, as defined by the Government’s procedures (Government press release).
- Administration: Current support is administered via employers (reimbursement paid to the employer), pursuant to the 17 April 2025 decision (Government press release).
Employers should maintain robust payroll records, proof of PIT remittance, employment contracts, and training certificates to substantiate claims under the wage and training programs (Government press release).
How to apply (employers)
- Confirm eligibility and register: Verify that your activities meet the high‑tech definitions and ensure the company is included in the High‑Tech Registry (see Eligibility section). Registration is required to access state support and tax privileges (Library of Congress).
- Prepare documentation: Collect employment contracts, monthly payroll and PIT payment confirmations, and (for training support) certificates from internationally recognized platforms as defined by the Government’s procedures (Government press release).
- Submit claims per procedure: File applications for reimbursements under the state support procedures adopted on 17 April 2025, observing the timelines and formats the Government sets (Government press release).
- Maintain compliance: Keep tax filings current and ensure continued satisfaction of high‑tech activity thresholds; registry status is reviewed and updated periodically (Library of Congress).
Relocating staff? Coordinate subsidy applications with your team’s visa, residency, and (if applicable) citizenship pathways to minimize onboarding friction.
Eligibility, High‑Tech Registry and qualification thresholds (90% revenue rule and tax compliance)
Armenia’s framework targets genuine technology businesses. To access tax preferences and state support, firms must meet legal thresholds and be registered in the official High‑Tech Registry (Library of Congress).
- High‑Tech Registry: The law introduces a dedicated registry of high‑tech entities. Registration is the gateway to tax privileges and supports; the registry is periodically updated by the authorities (Library of Congress).
- 90% revenue rule: At least 90% of sales must derive from high‑tech activities to qualify; this rule helps prevent misuse of the incentives (Library of Congress).
- Tax compliance: Applicants must be compliant with tax obligations; non‑compliance can lead to denial or loss of benefits (Library of Congress).
Good to know: Armenia’s high‑tech incentives complement, not replace, general tax rules and corporate obligations. Integrate them into your overall compliance plan with local bookkeeping and payroll systems (KPMG).
| Quick eligibility checklist | Status |
|---|---|
| Listed in the High‑Tech Registry | Required (source) |
| ≥90% revenue from defined high‑tech activities | Required (source) |
| Tax compliant (no material outstanding liabilities) | Required (source) |
| Roles and training align with official definitions | Recommended for PIT/training support (source) |
Next steps: Map your operations and hiring plan to Armenia’s definitions, then structure the entity and documentation accordingly. Our team can project your effective tax rate under the 1% turnover regime and R&D deduction, and coordinate investment and real estate needs for landing teams.
Conclusion. Armenia’s special tax incentives for IT companies and startups are now live through 2031. The 1% turnover tax, 200% R&D salary deduction, 10% PIT for certified researchers, and generous wage/training reimbursements together create a competitive package for building and scaling engineering teams in Yerevan and beyond (KPMG; Schneider Group; Government press release). To assess eligibility and secure benefits quickly, contact us for a tailored plan and filing support at /contact/.
FAQ
How long do Armenia’s IT/high‑tech tax incentives run?
The new framework is effective from 1 January 2025 through 2031, per the law and Tax Code amendments supporting the high‑tech sector (Library of Congress; KPMG).
What is required to qualify for the 1% turnover tax and other benefits?
Companies must be listed in the official High‑Tech Registry, derive at least 90% of revenue from government‑defined high‑tech activities, and maintain tax compliance. Registration is the gateway to tax privileges and state support (Library of Congress).
How does the 200% R&D salary deduction work for corporate income tax?
Eligible high‑tech companies can deduct 200% of qualified R&D salary expenses from their profit tax base, capped at 50% of taxable income. This reduces taxable profits and encourages hiring researchers and engineers (Schneider Group).
Who is considered a “labor migrant” for the 60% wage tax reimbursement?
A labor migrant is a foreign citizen or stateless person who had not worked in Armenia before March 1, 2022; dual citizens are excluded. Employers can recover 60% of PIT withheld from such employees’ wages under the high‑tech support procedures (Government press release).
Is there a reduced personal income tax for researchers?
Yes. Employees performing certified scientific research and experimental development are subject to a 10% PIT rate (instead of 20%), under definitions and certifications set by the Government (KPMG).
