Taxes in Armenia: Guide for Expats & Businesses (2025 Update)

Armenia has become an attractive destination for expats, entrepreneurs, freelancers, and investors seeking a transparent and straightforward tax system. Whether you’re planning to move, launch a business, or simply want to understand your tax obligations, this guide covers everything you need to know about taxes in Armenia—from income and corporate taxes to tax residency, incentives, and the latest changes for 2025.

Armenia Tax System Overview

Armenia offers a modern, competitive tax environment designed to attract international business and make life easier for residents and foreign investors. The Armenian tax system features:

• Simple rates for individuals and companies
  
  
• Special regimes for small businesses and IT professionals
  
  
• Support for startups and entrepreneurs
  
  
• User-friendly digital tax administration
  
  

The country uses a territorial tax system: in most cases, only income earned within Armenia is taxed. This is a big plus for digital nomads and expats with international income sources.

Personal Income Tax, Corporate Tax, and VAT

Personal Income Tax (PIT)

Armenia uses a flat personal income tax rate:

• 20% on all personal income (salary, freelance earnings, etc.)
  
  
• Applies to Armenian-source income for non-residents, and worldwide income for tax residents
  
  

There are no tax brackets, making calculations straightforward. Social payments, such as pension contributions (about 2.5–10% depending on income and age), may also apply.

Corporate Income Tax

The standard corporate tax rate in Armenia is:

• 18% on net profit
  
  

Dividends paid to non-residents: 5% withholding tax (subject to tax treaties)
Dividends to Armenian residents: generally not taxed if paid by an Armenian company

Value-Added Tax (VAT)

• Standard VAT rate: 20%
  
  
• Applies to most goods and services supplied within Armenia
  
  
• Businesses with annual turnover over 115 million AMD (about $290,000) must register for VAT
  
  

Other Key Taxes

• Microbusiness regime: 0% tax on business income for qualifying microbusinesses (annual turnover under 24 million AMD, about $60,000)
  
  
• Turnover tax regime: Small businesses may opt for a simplified turnover tax (1.5–5% of gross receipts) instead of full corporate tax
  
  
• Excise tax: Applied on specific goods like alcohol, tobacco, and fuel
  
  
• Property tax: On real estate, rates vary from 0.2% to 1% depending on property value
  
  

Tax Residency Rules

Understanding your tax residency status in Armenia is crucial for compliance:

Who is a tax resident?
You are considered a tax resident if you meet any of the following:

• Spend 183 days or more in Armenia within a 12-month period
  
  
• Your center of vital interests (main home, business, or economic interests) is in Armenia
  
  

Tax residents pay tax on their worldwide income.
Non-residents pay tax only on Armenian-source income.

Practical Example:
If you’re an expat working remotely from Armenia for a foreign company, you may not owe Armenian tax on your foreign salary—unless you become a tax resident.

Tax Residency Certificate:
If you need proof of Armenian tax residency for another country, you can apply to the Armenian tax authority for an official certificate.

Tax Benefits for New Residents and Businesses

Armenia actively encourages new residents and businesses with generous tax incentives:

For Microbusinesses and Startups

• 0% tax for microbusinesses: Entrepreneurs earning under $60,000/year may pay no income tax (except for specific professions like lawyers or accountants)
  
  
• Reduced rates for IT companies: New IT startups can enjoy 1% tax on salaries and 0% profit tax for up to five years
  
  

For Foreign Investors

• No currency controls: Freely move money in and out of Armenia
  
  
• Free Economic Zones: Export-oriented businesses in these zones enjoy exemption from VAT, profit tax, and property tax
  
  
• Double Taxation Treaties: Armenia has treaties with over 40 countries, reducing withholding taxes on cross-border payments
  
  

For Digital Nomads & Freelancers

• No tax on foreign-source income: If you’re not a tax resident, foreign income is not taxed
  
  
• Fast and easy business registration: Start a sole proprietorship (Individual Entrepreneur, IE) online in one day
  
  

Example:
A digital marketer living in Yerevan, but working for EU clients, registers as an IE, enjoys 0% tax as a microbusiness, and only pays tax on local Armenian income.

How to Register and Pay Taxes in Armenia

For Individuals

1. Register with the State Revenue Committee (SRC):
   Get a Tax Identification Number (TIN)—can be done online or in-person
   
   
2. Open a local bank account:
   Required for business activity and receiving payments
   
   
3. File annual tax returns:
   Most employees have tax withheld by their employer, but freelancers and entrepreneurs must file and pay quarterly or annually
   
   

For Businesses

1. Choose a legal form:
   Individual Entrepreneur (IE), LLC, JSC, etc.
   
   
2. Register with the State Registry:
   Fast, affordable process (often completed in one business day)
   
   
3. Register for taxes and VAT (if applicable):
   Businesses must select their tax regime (standard, turnover, or microbusiness) and register for VAT if above the threshold
   
   
4. Use e-invoicing and online reporting:
   Armenia’s tax administration is highly digitalized—returns, payments, and invoices are all managed online
   
   
5. Pay taxes through Armenian banks or the government portal:
   Payments are tracked in real-time for compliance
   
   

Tip: Most expats and foreign business owners find the process surprisingly quick and user-friendly compared to many countries.

Recent Changes and 2025 Updates

Armenia’s tax system is constantly evolving to stay competitive and attract international investment. Here are the key updates for 2025:

• Microbusiness thresholds adjusted: The maximum annual turnover for microbusinesses remains 24 million AMD, but the government plans to review this in light of inflation and currency changes.
  
  
• Digitalization improvements: The tax portal and online registration systems are now available in English, making access easier for foreigners.
  
  
• Tightening anti-avoidance rules: The State Revenue Committee is increasing oversight of transfer pricing and related-party transactions for multinational businesses.
  
  
• New DTA treaties: Armenia has recently signed or updated double taxation agreements, further reducing cross-border tax burdens.
  
  
• Tax incentives for green businesses: 2025 introduces new tax breaks for businesses investing in renewable energy and sustainability projects.
  
  

Stay updated by checking the State Revenue Committee’s website or consulting a local tax advisor.

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Frequently Asked Questions (FAQs)

Q1: What are Armenia’s main tax rates for individuals and companies?
Personal income tax is 20%. Corporate profit tax is 18%. VAT is 20%. Special regimes apply for microbusinesses and IT.

Q2: How do I become a tax resident in Armenia?
Spend at least 183 days a year in Armenia or move your primary business/life interests here.

Q3: Is foreign income taxed in Armenia?
Only for tax residents. Non-residents pay tax only on Armenian-source income.

Q4: Can I register a business as a foreigner?
Yes. Armenia makes it easy for foreigners to open businesses, own property, and access banking.

Q5: How do I pay taxes as a freelancer?
Register as an Individual Entrepreneur, file your returns online, and benefit from microbusiness or turnover tax regimes.

Q6: Are there tax treaties to avoid double taxation?
Yes. Armenia has treaties with over 40 countries, reducing withholding taxes on cross-border payments.

Q7: What are the tax advantages of living in Armenia as an expat?
Low flat taxes, generous microbusiness rules, no tax on foreign income for non-residents, and quick, easy compliance.

Conclusion

Armenia’s tax system is designed for transparency, simplicity, and growth. Whether you’re a business owner, freelancer, or expat, you’ll find competitive rates, innovative incentives, and a welcoming environment for doing business or living abroad. With constant improvements and a focus on attracting international talent, Armenia is one of the best places in Eurasia for tax-conscious expats and entrepreneurs.

Ready to get started?
Contact Relocation2Armenia for tailored tax consulting and hands-on support with registration, compliance, and business planning.