Armenian-resident entities, and non-resident entities doing business in Armenia through a PE, are liable for CIT. Armenia taxes residents on their worldwide income; non-residents are subject to CIT only on their Armenian-source income.
The standard CIT rate is 18%.
Taxable income is defined to be the difference between a taxpayer’s gross income and deductible expenses:
- Gross income encompasses all revenues received by a taxpayer from all economic activities unless the revenues are expressly exempted under the law.
- Deductible expenses encompass all necessary and documented expenses that are directly related to conducting business unless a specific provision in the law restricts the deduction.
Note that resident entities, registered PEs, and individual entrepreneurs are required to withhold income tax at source on payments to non-residents not having a registered PE in Armenia (see the Withholding taxes section).
The tax base for investment funds (excluding pension funds and warranty funds), which are registered in the Republic of Armenia, and for securitisation foundations, which are established based on the Law on Asset Securitisation and Asset-backed Securities, is the sum of net assets.
The dividends paid to the shareholder of investment funds or other similar allocations provided in a different manner shall not be deducted from the net assets of the investment funds.
The CIT rate for investment funds (excluding pension funds and warranty funds) registered in the Republic of Armenia, as well as for securitisation foundations, is 0.01% of the tax base.
The turnover tax generally replaces the CIT and VAT obligations for small and medium enterprises (SMEs). The tax rate is differentiated in accordance to the income type (see Turnover tax in the Other taxes section).
Local income taxes
Armenia does not have any provincial or local government taxes on income.