Armenia corporate tax: companies, VAT and cross-border payments

Choose the taxpayer and tax regime first

An Armenian company and an individual entrepreneur are different taxpayers. Ordinary resident companies are subject to profit tax on the statutory profit base at 18%; resident companies generally include domestic and foreign income. The general-regime rate for an individual entrepreneur is separately specified, so an owner cannot simply apply the company rate to all personal business receipts.

Small-business turnover and microenterprise systems are alternative regimes with eligibility, activity, connected-person and notification conditions. Turnover below a headline ceiling alone does not establish the right to use them. The legal form, activity and client/payment chain should be settled before comparing effective costs.

Residence and a foreign company’s Armenian activity

The Tax Code defines resident organisations by Armenian state registration. A foreign-incorporated entity is not made domestically incorporated merely because its owner lives in Yerevan. However, Article 27’s permanent-establishment rules can reach a fixed place of business, including a place of management, office and other listed facilities, as well as specified agency and service activity.

A foreign company with people negotiating, delivering services or managing operations from Armenia therefore needs a separate PE and treaty analysis. An Armenian registration rule is not a licence to treat all management performed in Armenia as tax-neutral. The owner’s previous jurisdiction may also continue to claim corporate residence or attribute income.

Ordinary profit tax: what the 18% does and does not measure

The starting point is taxable income less permitted documented deductions and other statutory adjustments. Accounting profit, cash left in the bank and taxable profit are not interchangeable. Expense substantiation, depreciation, related-party transactions and the treatment of foreign-source income can change the base materially.

An 18% company rate also does not describe the combined company-and-shareholder burden. A later dividend can create a separate shareholder or nonresident withholding liability. Keeping profits inside the company, paying salary and distributing dividends involve different timing and payroll consequences.

Turnover tax needs an activity-specific calculation

The ordinary eligibility ceiling is AMD 115 million of relevant turnover, subject to the full statutory exclusions and aggregation rules. Reforms changed several nominal turnover-tax rates and introduced or changed expense-linked relief. Older descriptions of a universal 5% service tax are unreliable.

The current table distinguishes activities: trading, manufacturing, catering, passive receipts and other activities do not share one rate. Certain high-technology activities have their own listed treatment. Documentary expense offsets and minimum liabilities can make the amount different from the headline percentage. A business operating several activities needs a reliable revenue and expense split.

Microenterprise treatment is narrower again. Professional activities and other excluded cases cannot obtain it just by keeping revenue small. Registering a nominal activity code does not change the work actually performed.

VAT and cross-border services

The standard VAT rate is 20%. Zero rating and exemption are distinct: qualifying exports and other specifically listed transactions may be zero-rated, while exempt supplies have a different input-tax consequence. A foreign customer is not by itself proof that a service is an export for VAT purposes.

The AMD 115 million threshold interacts with the applicable business regime and exclusions. Voluntary registration, loss of a special regime, imports and particular transactions can create obligations independently of a simplistic annual-turnover comparison. Record the place-of-supply analysis, customer status, contracts and export evidence.

For a service company, map both its own sales and the foreign services it purchases. Withholding, VAT and profit-tax deductibility are separate questions; a single invoice can require more than one analysis.

Payments to nonresident companies

The domestic rates below concern relevant Armenian-source income of nonresident organisations without an Armenian PE. A treaty, valid residence evidence and the legal character of the payment can change the result. They are not the personal income-tax rates for an Armenian resident shareholder.

Employment costs and compliance

An employer must identify employee income tax, funded-pension coverage, defence stamp duty and the 2026 health-insurance phase-in separately. Nationality, residence status, birth date and insurance history affect the result. State contributions to the pension or health systems are not automatically an employer surcharge.

For ordinary employees, the headline 20% income tax is a withholding from salary, while contribution and insurance amounts have separate caps and thresholds. A gross salary promise must make clear whether the employer or employee bears optional benefits or any agreed gross-up. Statutory leave, sickness procedures and workplace obligations also affect the cost of employment.

Annual filings, foreign operations and an orderly exit

The ordinary calendar-year profit-tax return and final payment are generally due by 20 April of the following year. Payroll, VAT and turnover regimes have their own reporting cycles; a company with little profit can still have regular filing duties. Electronic filing access and responsibility should be arranged at incorporation.

Keep company source-of-funds records, contracts, related-party documentation and beneficial-owner records aligned. No general CFC or corporate migration-exit classification is asserted beyond the specific provisions reviewed here; a liquidation, asset sale, distribution or transfer of activity must be analysed in its own right.

When an owner leaves, update bank and registry information and reassess where the company actually operates. Closing a residence card does not close the company or remove outstanding tax returns.