Armenia

The tax regime in Armenia consists of several types of taxes that are levied on individuals and businesses. Here are the main types of taxes in Armenia:

Value Added Tax (VAT):

VAT is a tax that is levied on the supply of goods and services in Armenia. The standard VAT rate in Armenia is 20%, but there are reduced rates of 0% and 10% for certain goods and services.

Profit tax:

Profit tax is a tax that is levied on the profits of companies and is calculated as a percentage of their taxable income. The current profit tax rate in Armenia is 18%.

Social security contributions:

Social security contributions are taxes that are levied on both employers and employees. The current social security contribution rate in Armenia is 25.9% of gross salary.

Property tax:

Property tax is a tax that is levied on the value of real estate property in Armenia. The current property tax rate in Armenia is 0.5% of the property’s assessed value.

Excise tax:

Excise tax is a tax that is levied on specific goods, such as tobacco, alcohol, and gasoline. The excise tax rate varies depending on the type of product.

Customs duties:

Customs duties are taxes that are levied on imported goods. The rate of customs duties varies depending on the type of product and the country of origin.

It’s worth noting that there are certain tax exemptions and incentives available to businesses operating in Armenia, particularly those operating in certain industries or regions. The Armenian government also provides a simplified tax regime for small businesses with annual turnover below a certain threshold.

TAX SLABS-

INCOME TAX RATES: –

Individuals are classified into two categories for personal income tax (PIT) purposes:

• Residents are liable for tax on their worldwide income.
• Non-residents are liable for tax only on their Armenian-source income.

Unified Income tax rates: –

• Income from royalties and interest (if not exempt) is subject to 10% tax. If paid by a tax agent (i.e. legal entity, individual entrepreneur), tax should be withheld at source.
• Income from lease of property is subject to 10% tax. Starting from 1 January 2020, if the income from lease exceeds AMD 60 million during the tax year, the individual should pay 10% income tax in addition to the tax withheld by the tax agent.
• Income from the sale of property is taxed at 10% or 20% (depending on the type of property and whether sold to a tax agent or individual). The sale of non-entrepreneurial property to individuals is exempt from tax. Starting from 1 January 2020, dividends received by foreigners are subject to 5% income tax (from dividends on the income generated after 1 January 2020), and dividends received by Armenian citizens are subject to 5% income tax (from dividends on the income generated after 1 January 2018).
• The tax withheld from the dividends is subject to refund if the dividend received from a resident entity is invested in the capital of the same resident entity during the same tax year.
• Other income paid by a tax agent is subject to final withholding on a monthly basis. The taxable base is the gross income minus deductible income. Other income will be withheld at a flat rate of 20%.

CORPORATE TAX RATES: –

• General tax regime. Unless a company opts for a special tax regime it will be subject to 18% corporate income tax (CIT) and 20% value-added tax (VAT). The VAT rate is 0% if the goods or services are exported. CIT returns are filed annually, while VAT returns are filed monthly.
• Turnover tax. Turnover tax is a form of a sales tax, with tax rates normally in the range of 1.5% to 5%, replacing CIT and VAT. Only small businesses with annual sales of less than AMD 115 million (approximately, $240,000) can qualify for this tax regime. Turnover tax returns are filed on a quarterly basis. 
• Micro-businesses. Micro-businesses, defined as businesses with annual sales of less than AMD 24 million (approximately, $50,000) are exempt from CIT and VAT. However, there is a list of excluded businesses that cannot take advantage of this tax system, such as traders based in the capital city of Yerevan and many service businesses.

Companies can opt for turnover tax or micro-business regimes within 20 calendar days following the company’s registration.