Understanding taxes in Armenia is essential before you register a business or accept a job. The system is straightforward compared with most of Europe, but it changed a lot in 2025–2026: turnover tax rates went up, legal, accounting, management consulting and staffing services lost access to turnover tax, IT certificates were replaced by a new high-tech regime, and universal health insurance started.
This guide is written by Team2B accountants, who keep the books for 1,200+ companies in Armenia. It is general information; your exact position depends on your activity and citizenship.
What are the main tax rates in Armenia in 2026?
| Tax | Rate | Notes |
|---|---|---|
| Personal income tax | 20% flat | Salaries and most personal income |
| Dividends | 5% | Paid by the company as tax agent |
| Rent and royalties | 10% | |
| Corporate profit tax | 18% | General regime |
| VAT | 20% | Mandatory above 115 million AMD turnover |
| Turnover tax | 1–12% | For turnover up to 115 million AMD |
| Microbusiness | 0% on business income | Up to 24 million AMD; allowed activities only |
| Funded pension | 5% / 10% | For people born in 1974 or later, including foreigners |
| Health insurance | 4,800 or 10,800 AMD per month | From 1 January 2026, for salaries above 200,000 AMD |
Who is a tax resident in Armenia?
You are an Armenian tax resident if either:
- you spend 183 days or more in Armenia in a calendar year; or
- your centre of vital interests (family, business, economic ties) is in Armenia.
Being a tax resident in Armenia does not automatically end your tax residency elsewhere. Double tax treaties decide which country has priority.
How does turnover tax work?
Turnover tax is the most popular regime for small businesses and sole proprietors. It is available if annual turnover does not exceed 115 million AMD. Since 1 January 2025 the rates are:
| Activity | Turnover tax rate |
|---|---|
| Trade | 10% |
| Production | 7% |
| Catering | 12% |
| Other activities and rent | 10% |
| Certified high-tech companies | 1% |
For trade, production, catering and other activities, part of your documented expenses for the quarter is deducted from the tax: 9.5%, 5%, 9% and 6% of expenses respectively. The tax cannot go below a minimum of 1%, 3%, 3.5% and 4.5% of turnover. In short: tax = max(rate × turnover − deduction rate × expenses, minimum rate × turnover). Rent, interest and royalties get no deduction. Try the numbers in our turnover tax calculator. Reports are filed quarterly. You choose the regime within 20 days of registration or by 20 February each year.
Important: since 1 July 2025, legal and accounting services (NACE 69), management consulting and head-office activities (NACE 70), and temporary staffing and HR provision (NACE 78.2, 78.3) are excluded from both turnover tax and microbusiness. Other professional services such as IT, advertising, engineering, design and translation remain eligible for turnover tax (though not for microbusiness). Always check your activity code.
What does a sole proprietor on turnover tax pay?
| Payment | Amount |
|---|---|
| Turnover tax | Rate by activity (see above) |
| Fixed profit tax | 5,000 AMD per month |
| Social payment (born 1974 or later) | 5,000 AMD per month |
| Stamp (military) duty | 12,000 AMD per year (120,000 AMD if income exceeds 12 million AMD) |
| Health insurance | 129,600 AMD per year by 20 April if income exceeds 2.4 million AMD |
What is the microbusiness regime?
Microbusiness status applies to businesses with annual turnover up to 24 million AMD. They are exempt from VAT, profit tax and turnover tax, and a sole proprietor does not pay the 5,000 AMD monthly fixed tax. Employees’ wages are still subject to the normal 20% income tax withheld by the business.
But many activities popular with relocants are excluded: IT, consulting, legal, accounting, marketing, design and trade, as well as anyone receiving rent, royalties or interest. Freelance developers and designers therefore usually cannot use microbusiness and need turnover tax or the general regime instead.
What tax benefits exist for IT companies?
The old IT certificates are no longer issued, and their benefits ended on 1 January 2025. The new regime for 2025–2031 offers:
- 1% turnover tax for companies in the High-Tech registry with at least 90% qualifying revenue;
- a 200% deduction for R&D expenses;
- a 60% refund of income tax on wages for new hires.
Registration in the High-Tech registry and correct revenue classification are critical. We help IT companies plan this from the day they register.
What payroll taxes apply to employees?
| Payroll item | Amount |
|---|---|
| Income tax | 20% |
| Funded pension (born 1974 or later) | 5% of salary up to 500,000 AMD; above that 10% minus 25,000 AMD; maximum 87,500 AMD per month |
| Stamp duty | 1,000 AMD per month (15,000 AMD if salary exceeds 1 million AMD) |
| Health insurance | 0 up to 200,000 AMD gross; 4,800 AMD per month for 200,001–500,000 AMD; 10,800 AMD above 500,000 AMD (phase 1) |
The funded pension also applies to foreigners born in 1974 or later. All of these are withheld from the employee; Armenia has no separate employer social contributions. See your take-home pay in our salary calculator.
What other compliance rules should you know?
- E-invoicing is mandatory.
- Cash registers (e-KKM) are being expanded from 1 January 2027 under law HO-309-N.
- VAT becomes mandatory once turnover exceeds 115 million AMD.
- Quarterly turnover tax reports and monthly payroll reports must be filed on time.
From 1 November 2026 taxes also matter for your residence: a business-based permit can be cancelled if no taxes are assessed within 180 days. Keeping your filings active protects your Armenia residence permit.
How do Armenian taxes interact with your home country?
- US citizens are taxed on worldwide income wherever they live and must file US returns.
- Russian tax residents remain liable for Russian tax on worldwide income, must report a foreign residence permit to Russian authorities within 60 days of entering Russia, and must file CFC notifications for foreign companies they control.
- EU citizens should check exit rules and double tax treaties of their country.
We recommend a consultation that covers both sides before you move.
Tax examples by profile
The examples below are simplified and for orientation only; your actual liability depends on activity code, expenses and registration.
| Profile | Likely regime | What applies |
|---|---|---|
| Employee of an Armenian company | Payroll | 20% income tax, funded pension (if born 1974+), stamp duty, health insurance above 200,000 AMD gross |
| Freelance developer as sole proprietor | Turnover tax (other activities) | 10% turnover tax (less 6% of documented expenses, minimum 4.5% of turnover), 5,000 AMD fixed profit tax per month, stamp duty, social payment if born 1974+ |
| Certified high-tech LLC | High-Tech registry regime | 1% turnover tax if 90%+ qualifying revenue, 200% R&D deduction, 60% wage tax refund for new hires |
| Consulting or legal firm | General regime | 18% profit tax; VAT above 115 million AMD |
| Sole proprietor on the general regime | General regime | 18% profit tax on profit plus social payment if born 1974+ (the “23%” sometimes quoted is 18% + 5%) |
| Small shop | Turnover tax (trade) | 10% turnover tax; cash register rules expanding from 2027 |
| Shareholder of an LLC | Dividends | 5% withheld by the company |
| Landlord | Rental income | 10% |
What are the key tax deadlines?
- 20 days after registration: choose your tax regime.
- 20 February: annual deadline to switch regimes.
- Quarterly: turnover tax reports.
- Monthly: payroll reports and payments.
- 20 April: health insurance payment of 129,600 AMD for sole proprietors with income above 2.4 million AMD.
How do you choose the right tax regime?
- Identify your activity code and check whether it is excluded from turnover tax or microbusiness.
- Estimate annual turnover against the 24 million and 115 million AMD thresholds.
- Consider expenses: the general regime taxes profit at 18% (for both LLCs and sole proprietors), turnover tax taxes revenue with a partial expense deduction. Compare the options in our tax calculators.
- If you are an IT company, assess whether you can reach 90% qualifying revenue for the 1% regime.
- Decide within 20 days of registration.
What changed in Armenian taxes in 2025–2026?
| Change | Since | Who is affected |
|---|---|---|
| New turnover tax rates (10% / 7% / 12% / 1%) | 1 January 2025 | Small businesses and sole proprietors |
| Legal, accounting, management consulting and staffing services (NACE 69, 70, 78.2, 78.3) excluded from turnover tax and microbusiness | 1 July 2025 | Lawyers, accountants, management consultants, staffing agencies |
| IT certificates replaced by High-Tech registry regime (to 2031) | 1 January 2025 | IT companies |
| CRS exchange of bank account information | 2025 | Anyone with accounts in Armenia |
| Universal health insurance (4,800 / 10,800 AMD per month for employees) | 1 January 2026 | Employees above 200,000 AMD gross; sole proprietors above 2.4 million AMD |
| Cash register (e-KKM) expansion | 1 January 2027 | Businesses selling to consumers |
If you set up your business before these changes, review your regime: what was optimal in 2024 may no longer be available or efficient.
How can Team2B help?
Our accounting plans cover tax reporting, payroll and regime selection: START from 30,000 AMD per month (sole proprietor, up to 1 employee, quarterly reporting), BUSINESS from 80,000 AMD per month (up to 10 employees) and PRO on request. Marketplace sellers start from 20,000 AMD. We also register companies and support your relocation to Armenia. Visit accounting2b.am or contact us.
Frequently asked questions
What is the personal income tax rate in Armenia in 2026?
Armenia has a flat personal income tax of 20 percent. Dividends are taxed at 5 percent, and rental income and royalties at 10 percent.
When do I become a tax resident of Armenia?
You are an Armenian tax resident if you spend 183 days or more in Armenia in a calendar year, or if your centre of vital interests is in Armenia. Tax residents are taxed on worldwide income under Armenian rules, subject to double tax treaties.
What is the turnover tax in Armenia?
Turnover tax is a simplified regime for businesses with annual turnover up to 115 million AMD. Since 1 January 2025 the rates are 10 percent for trade, 7 percent for production, 12 percent for catering, 10 percent for other activities and rent, and 1 percent for certified high-tech activities. Part of documented expenses is deducted from the tax (9.5% of expenses for trade, 5% production, 9% catering, 6% other), but the tax cannot fall below a minimum of 1%, 3%, 3.5% and 4.5% of turnover respectively. Reports are filed quarterly.
Can freelancers use the microbusiness regime in Armenia?
Only if their activity is allowed. Microbusiness status covers turnover up to 24 million AMD and exempts the business from VAT, profit and turnover tax, but IT, consulting, legal, accounting, marketing, design and trade are excluded. A sole proprietor on microbusiness does not pay the 5,000 AMD monthly fixed tax that applies under turnover tax.
Are there still IT tax benefits in Armenia?
The old IT certificates are no longer issued and those benefits ended on 1 January 2025. A new regime runs from 2025 to 2031: companies in the High-Tech registry with at least 90 percent qualifying revenue pay 1 percent turnover tax, can deduct 200 percent of R&D costs and get 60 percent of wage income tax refunded for new hires.
Is health insurance mandatory in Armenia?
Universal health insurance started on 1 January 2026. In the first phase it is withheld from employees earning more than 200,000 AMD gross: 4,800 AMD per month for salaries of 200,001–500,000 AMD and 10,800 AMD above 500,000 AMD. Sole proprietors with income above 2.4 million AMD pay 129,600 AMD per year by 20 April.
Do I still pay tax in my home country after moving to Armenia?
Possibly. US citizens are taxed on worldwide income regardless of residence. Russian tax residents still pay Russian tax on worldwide income, must report a foreign residence permit within 60 days of entering Russia, and may have to file CFC notifications for foreign companies. Get advice for both countries.
Sources
- State Revenue Committee of Armenia
- PwC Worldwide Tax Summaries: Armenia
- Legal acts database ARLIS (Tax Code)
- Central Bank of Armenia
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