Armenia

The CIT for the resident companies implementing special construction projects exclusively outside Armenia and approved by the government is reduced to a 5% rate.

Taxpayers engaged in agricultural production are exempt from CIT on that income until 31 December 2026.

Taxpayers engaged in production of hand-made carpets are exempt from CIT on the income received from the sale of hand-made carpets.

Taxpayers operating in free economic zones are exempt from CIT in respect of income received from activities performed in free economic zones in Armenia. Armenian resident companies implementing a business plan approved by the government may deduct the amount of the annual salaries for the new jobs created from the CIT liability of that year, but not greater than 30% of the actual CIT calculated. The incentive is applicable for five fiscal years, in addition to the year of the start of the business.

Between 2025 and 2031, Armenia is introducing a series of tax incentives to boost its IT and high-tech sectors. These include:

• a 1% turnover tax for companies engaging in government-defined high-tech activities.
• companies can deduct 200% of qualified R&D salaries (capped at 50% of taxable income).
• certified researchers benefit from a reduced personal income tax rate of 10%.
• employers can recover 60% of wage income tax for new hires and labor migrants, and receive 50% support for internationally certified training.

Eligibility requires companies to be part of the High-Tech Registry, earn over 90% of revenue from high-tech operations, and maintain good tax compliance. Armenia aims to use these incentives to foster growth and attract tech businesses, creating opportunities for businesses to optimize their financial models by leveraging these tax benefits.

Foreign tax credit

Tax residents are allowed to credit foreign taxes paid on income received abroad against their Armenian tax liabilities. The amount of foreign tax credit is limited to the amount of Armenian tax that would arise from the equivalent income in Armenia.