Armenia

Corporate - Tax credits and incentives

Last reviewed - 11 January 2023

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.

The Government of the Republic of Armenia provide tax incentives to startups and exiting companies in IT sector.

  • According to the Law “On State support to IT Industry” IT startups are exempt from CIT, as well as use a reduced personal income tax flat rate of 10% instead of general 20%.
  • Government decree on the state support to organizations and individual entrepreneurs of IT sector N 399-Լ, dated 24.03.22 gives opportunities to return 50% of paid personal income tax to legal entities and individual entrepreneurs operating in IT sector for the newly created jobs.
  • Government decree on state support to organizations and individual entrepreneurs of IT sector N 1863-Լ, dated 01.12.22 gives opportunities to the companies in IT sector to return up to 95% of paid personal income tax.

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.