Armenia

Corporate - Tax credits and incentives

Last reviewed - 13 July 2020

The Tax Code provides additional tax incentives to Armenian resident entities meeting several criteria under the government's export promotion-oriented program. The group of entities involved in the program approved by the government enjoy CIT rates reduced up to tenfold from the general 20% CIT rate. Mainly, the group of companies exclusively engaged in exports of goods and services with an annual group turnover of at least AMD 50 billion will enjoy a 2% reduced CIT rate. For the group of companies whose total annual export turnover is at least AMD 40 billion, the CIT rate will be reduced to 5%. Note that there are several other conditions the companies should meet to be eligible for the program.

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 2024.

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.

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.