Armenia

Individual - Significant developments

Last reviewed - 13 July 2020

Starting from 1 January 2020, income tax should be calculated at 23% flat rate and to be gradually lowered to 20% till 2023 as the table belov presents:

Period

Income Tax rate

Starting 1 January 2020

23%

Starting 1 January 2021

22%

Starting 1 January 2022

21%

Starting 1 January 2023

20%

 

Income tax that has not been duly withheld can be withheld for the period of no more than the last three months, and the excess tax withheld from the taxpayer shall be offset against future withholdings or should be refunded within one month after it has become known but no more than for the last three years.

From 1 July 2018, all employees, notaries, and individual entrepreneurs born after 1 January 1974 should make funded pension contributions. Also, the 5% rate is reduced to 2.5%, and the maximum gross income from which the contribution is withheld is capped at AMD 500,000, so the maximum amount of monthly contribution is capped at AMD 12,500.

In parallel to the decrease in PIT rates, according to the RA “Law on funded pensions” the principle of equal participation by citizens and the state in respect of funded pension allocations will be restored.

In particular, starting from 1 July 2020 the maximum threshold for the calculation of the pension contribution will change and instead of AMD 500,000 it will become AMD 1,020,000 (15 times of minimum monthly salary of AMD 68,000).  Please note that from 1 January 2020 the minimum monthly salary is increased from AMD 55,000 to AMD 68,000.

Additionally, from 1 January 2021 to 31 January 2021, the pension contribution payment will be calculated as follows:

  • 3,5% of the monthly gross salary, if it is less than AMD 500,000.
  • 10% of the maximum threshold minus AMD 32,500, if the monthly gross salary is more than AMD 500,000.

Also, from 1 January 2022 to 31 January 2022, the pension contribution payment will be calculated as follows:

  • 4,5% of the monthly gross salary, if it is less than AMD 500,000.
  • 10% of the maximum threshold minus AMD 27,500, if the monthly gross salary is more than AMD 500,000.

Starting from 1 January 2020 dividends received by foreigners are subject to 5% income tax (dividends from the income generated after 1 January 2020), like dividends received by Armenian citizens.

The monetary prizes and benefits in kind received at competitions, up to AMD 50,000 per prize, are non-taxable.