Taxation/Salaries

Working in Europe | Taxation/salaries | Armenia

TAXATION

The tax system in Armenia is generally favourable for business. Unlike the tax systems in several other CIS countries, Armenia's system is structured such that most of the taxes are federal and are paid directly to the budget.

Armenia has seven main taxes:

State taxes

  • a. value added tax (“VAT”);
  • b. excise tax;
  • c. profit tax;
  • d. income tax;
  • e. environmental tax;
  • f. road tax;
  • g. turnover tax;

Municipal taxes:

  • a. Property Tax;
  • b. Land Tax.

Taxes defined in the Armenian laws shall be paid by:

domestic taxpayers - residents and foreign taxpayers - non-residents.

1. Income Tax

The income tax is a direct tax paid to the RA state budget by taxpayers, which is levied from the taxable income of reporting period of natural persons.

In the Republic of Armenia natural persons, i.e. RA citizens, foreign citizens and stateless persons, including individual entrepreneurs and notaries, pay income tax, if:

  • They are a RA resident, i.e. they resided in the Republic of Armenia for a total of 183 or more days at any stage of the 12-month period which starts and ends during the fiscal year, or they have the center of vital interests located in the Republic of Armenia, or if they are a state servant of the Republic of Armenia, work temporarily away from the territory of the Republic of Armenia and received taxable income in the RA territory or outside its borders.
  • They are non-resident and received taxable income from Armenian sources.

2. VAT

Any person (individual entrepreneur, legal entity etc.), who carries out economic activity and whose taxable turnover of the last calendar year realized transactions is more than 58.35 million AMD (VAT threshold) is considered as a VAT payer.

The following transactions are subject to the VAT taxation:

  • goods supply
  • service provisions
  • goods importation

There are two VAT rates:

  • 20% (If the tax is included in the goods and services cost, the VAT shall be determined by the rate 16.67 percent of the total price of the goods and services).
  • 0%, that is zero rate (this rate is usually used for the exportation of goods and services, as well as for the goods and the services which are bought in Armenia for the official use of diplomatic representations and equalized institutions).

VAT exemption

Scientific and research works are in the list of the VAT exemption cases․

Also any EU funded project implemented by Armenian beneficiary will be exempt from VAT following a special procedure with the Ministry of Economy of RA.

More detailed info can be found at Tax service of RA

SALARIES

Employee’s contributions:

Pension fund - 2,5% (persons that are born before 1974 do not make this contribution)

Income tax rates:

  • From January 1, 2020 – 23%
  • From January 1, 2021 -22%
  • From January 1, 2022 -21%
  • From January 1, 2023 -20%

Employer’s contributions:

The state organizations provide Social Package to their employees. The social package is a program aimed at ensuring the health, education, recreation and other issues of employees and / or their immediate family members. Unfortunately foreign workers cannot benefit from this program, but many of the non-state organization provide health insurance and other benefits to their employees. Please check out this information with your future employer.