How much is income tax in Armenia?

Individuals pay taxes on income earned in Armenia. Income originated in other countries may be taxable in Armenia only if the individual is a resident of Armenia, i.e. stays in Armenia for more than 183 days within a 12-months period.

Dividends, capital gains from sale of stock, insurance payments, income from farming, and certain other types of income are not taxable.

Passive income (interest, rent, royalties) is normally taxed at 10%.

Income earned from employment is taxed at the following rates:

  • Income of up to 120,000 AMD/month – 24.4%
  • Income of 120,000 to 2 million AMD/month – 29,280 AMD and 26% of the amount in excess of 120,000 AMD
  • Income in excess of 2 million AMD/month – 518,080 AMD and 36% of the amount in excess of 2 million AMD

Income earners also must pay social security payments. The rate is 5% on income of up to 500,000 AMD and 10% on the amount in excess of 500,000 AMD. The maximum amount of social security payments will stay capped at AMD 25,000/month until July 1, 2020.

Armenia does not have gift or inheritance taxes or net worth tax. Real estate and other transactions between individuals are normally not taxable. However, individuals who sell non-residential real estate or who acquire and dispose of more than two residential properties or vehicles within one calendar year may be subject to 20% VAT.

How do I pay my taxes?

In Armenia, employers and other entities paying income to individuals (“tax agents”) are normally required to withhold taxes and pay them to the government on behalf of these individuals. As a result, individuals do not have to file annual tax returns unless they have received income that is taxable and has not been declared by a tax agent.

Do I have to register somewhere?

As a general rule, you do not have to register with tax authorities and obtain a taxpayer ID. However, you may be required to register as an “individual entrepreneur” and obtain a taxpayer ID if you engage in “entrepreneurial activity,” i.e. independent and periodic sale of goods or services with the purpose of making profit. If you are an individual entrepreneur, you may qualify for one of the forms of simplified taxation for small and medium enterprises (e.g. turnover tax) that replace the regular income tax.

Do I have to file taxes?

You do not have to file tax returns unless you have received income that is taxable in Armenia and has not been accounted for by the entity that paid the income, e.g. your employer, customer etc.

What do I do if I’m contacted or visited by tax authorities?

Interactions between tax authorities and taxpayers are strictly regulated and can take place only within proper administrative or criminal proceedings. Inspections on the premises of the taxpayer must be specifically authorised in writing by the head of the competent tax office. The taxpayer should receive a notice on inspection at least three business days in advance unless such notice would defeat the purpose of inspection (e.g. checking compliance with regulations on registering employees, use of foreign currency, issuance of payment receipts etc.). Any action or inaction of tax officials may be appealed administratively to the superior body or judicially by filing a claim with the administrative court.

This section is cited from RepatArmenia Foundation.