Resident entities are legal and business entities whose existence is established under Armenian law. Non-resident entities are those whose existence is established under foreign law (including subdivisions of foreign entities in Armenia).
Permanent establishment (PE)
The domestic definition for a PE essentially adopts the definition for PE found in the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention.
Mainly, the non-resident’s PE in Armenia is defined as the place of business in Armenia registered at the tax authorities as a taxpayer through which the non-resident performs business activity in Armenia, regardless of the period of the activity.
In particular, this will include the following:
- The place of production, processing, sorting, packaging, and/or delivery of goods.
- Any place of management.
- The place of geological research, preparatory works for mineral extraction, and/or related supervisory services.
- The place of activity in relation to installation, adjustment, and deployment of playing machines, computer and communication networks, amusement rides, transportation, or other infrastructures.
- The place of sales of goods in the territory of Armenia.
- The place of construction, montage, or assembly works, as well as the place of supervision services of those works.
- In case a joint activity agreement is signed with a non-resident to perform activity in the territory of Armenia, the PE will be the place of the entity that is responsible to report on that activity under the contract.
In addition, a non-resident’s activities will create a PE if the non-resident provides services in Armenia through its employees or other hired personnel for 183 or more days in any tax year starting from the day of activities within the framework of one project or more than one related projects.