Living and doing business in Armenia
Tax Regimes for IEs in Armenia in 2026: Micro-business, Turnover Tax, General System
An IE in Armenia has three main regimes: micro-entrepreneurship (turnover up to 24 million AMD), turnover tax (up to 115 million) and the general system with 20% VAT. Since 1 January 2025 turnover tax rates rose: trade 10%, production 7%, other activity 10%, IT 1%, but an expense deduction was introduced. You choose by 20 February, or within 20 days of registration.
Contents
Three regimes for IEs
The regime decides which taxes and reports you have. The Tax Code of Armenia offers IEs:
- Micro-entrepreneurship (միկրոձեռնարկատիրություն): exemption from most state taxes at turnover up to 24 million AMD.
- Turnover tax (շրջանառության հարկ): a simple tax on turnover at up to 115 million AMD.
- General system: 20% VAT and income tax. This is the default if you file no statement.
Thresholds come from the SRC service pages on the government portal: micro-entrepreneur, turnover tax, VAT.
Turnover tax: rates from 1 January 2025
Rates are set by Article 258 of the Tax Code as amended by law HO-285-N (adopted 12.06.2024, in force from 01.01.2025). Rates used to be lower: trade 5%, production 3.5%, other activity 5% (2016 text).
| Activity | Rate | Expense deduction | Minimum tax |
|---|---|---|---|
| Trade (purchase and sale) | 10% | 9.5% of expenses | 1% of turnover |
| Trade in secondary raw materials on the Government list | 5% | none | none |
| Production | 7% | 5% of expenses | 3% of turnover |
| Public catering | 12% | 9% of expenses | 3.5% of turnover |
| Rent, interest, royalties | 10% | none | none |
| Sale of other assets, including real estate | 10% | none | none |
| Other activity (services) | 10% | 6% of expenses | 4.5% of turnover |
| High-tech activity on the Government list | 1% | none | none |
| Sale of newspapers by editorial offices | 1.5% | none | none |
How the deduction works. The tax at the rate is reduced by a set percentage of documented expenses, but the result cannot fall below the "minimum". Only expenses directly tied to production, works, services and sales, supported by documents, are deducted; depreciation of production fixed assets is excluded. An unused deduction carries forward (Article 258, parts 6-7).
Example for services. Turnover 10 million AMD, expenses 6 million. Tax at 10% is 1,000,000. Deduction 6% of 6 million is 360,000. Tax payable is 640,000, which is above the minimum of 4.5% (450,000).
In addition, an IE on turnover tax pays profit tax of 5,000 AMD per month, which is the final liability for that tax (Article 125(3)).
The 1% high-tech rate
Activities on the Government list (high-tech sector) are taxed at 1%. Per the ARLIS footnote to Article 258, the change made by law HO-500-N of 04.12.2024 applies from 01.01.2025 to 31.12.2031. There is a separate catalog article on the IT certificate and related benefits. We have not yet checked the Government's activity list against the primary source: check your activity code before choosing the regime.
Micro-entrepreneurship
- Threshold: turnover for the previous year across all activities of up to 24 million AMD.
- Statement: form 257, within 20 days of registration and then every year by 20 February. Without it the benefits do not apply.
- Exemption: from state taxes, except taxes on imported goods, income tax on payments to individuals, and excise, environmental and road tax.
- Basis: Order No. 558-N of the SRC Chairman of 27.08.2019 and the Tax Code.
Exclusions. Article 267(5) as amended by HO-285-N (in force from 01.01.2025) does not allow micro-entrepreneurship for, among others: trade (purchase and sale); consulting, legal, accounting, engineering, advertising, design, marketing, translation, expert, medical, hairdressing and beauty services; car repair; intermediary services (including real estate deals); software development; information processing; research; construction and design work; real estate appraisal and surveying; baths and saunas; and banks, insurers, notaries and other financial-sector firms. Check the exact list in the article text: if your activity is on it, you cannot use micro-entrepreneurship.
General system
If you file no statement for a special regime, or you exceed the limits, the general system applies. VAT is 20%, with 0% on exports. The VAT registration statement is form 264.
When you move from turnover tax to the general system, the unused deduction is subtracted from gross income with multipliers: trade 10, production 20, catering 10, other activity 15 (Article 264, part 4).
Comparison and choice
| Micro-business | Turnover tax | General system | |
|---|---|---|---|
| Turnover, previous year | up to 24 million | up to 115 million | no limit |
| Main tax | 0% (with exceptions) | 1-12% with deduction | 20% VAT + income tax |
| Statement | form 257 | form 201 | form 264 (VAT) |
| Deadline | 20 days / by 20 February | 20 days / by 20 February | default |
| Not available to | list in Art. 267(5) | banks, insurers, excise payers etc. (Art. 254(3)) | — |
How to choose:
- Your activity is not on the exclusion list and turnover is up to 24 million: look at micro-business.
- Services with small expenses and turnover up to 115 million: turnover tax, and count the deduction.
- Large expenses, or clients who are VAT payers and need input VAT: compare the general system.
- Listed IT activity: compare 1% with the other options.
Deadline: choose by 20 February. If you miss it, you stay on the general system until next year.
What is not covered
The amount of social payments for IEs, mandatory health insurance (introduced in stages from 2026) and income tax under the general system depend on your income and change. Get these figures from an accountant for your case.
Frequently asked questions
What is the turnover tax for an IE in Armenia?
How much tax does an IE pay as a micro-entrepreneur?
What is the VAT rate in Armenia?
By what date must an IE choose a tax regime?
Does an IE on turnover tax pay anything else?
Can an IT IE pay 1%?
Sources and laws
- Law HO-285-N of 12.06.2024 (in force 01.01.2025): Art. 258 (rates and deductions), Art. 125(3), Art. 264, Art. 267(5)
- Tax Code of the Republic of Armenia (HO-165-N of 04.10.2016), Arts. 59, 254-264, 267, ARLIS
- SRC via hartak.am: turnover tax, 115 million AMD threshold, form 201
- SRC via hartak.am: micro-entrepreneur, 24 million AMD threshold, form 257
- SRC via hartak.am: VAT payer, 115 million AMD threshold, 20% rate and 0% on exports, form 264
This article is for general information and does not replace advice on your specific case.
