A taxation system is a specific tax regime that can change how much tax you pay, depending on the type of business or tax regime you use. In Armenia, the general, turnover, and micro-enterprise taxation systems operate.

Before choosing a taxation system, you should know:

• What activities will you be conducting in the upcoming tax year?
• How much annual turnover do you expect?
• Will you be taking advantage of tax benefits?
• In which cases is it beneficial to operate under the general taxation system?

After registering a private enterprise or legal entity, you must submit an online declaration to the tax authority within 20 days.

Important considerations:

• If you do not submit a declaration of choice of taxation system within 20 days, you can no longer choose a system for the given tax year. Moreover, you will automatically be taxed under the general system.
• The declaration of choice of taxation system must be submitted annually, from January 1 of each year to February 20 of the following year, regardless of having previously been registered in the given system.

The taxation system must be changed if:

• The annual sales turnover of your business exceeds the threshold set by the given system, for example, 115 million AMD in the case of turnover taxation.

You can also change the system if:

• The need for change arises due to the specifics of your activity.
• You have decided to operate under a different taxation system.

It is possible. In that case, you will automatically be taxed under the general taxation system (you will pay value-added tax (VAT) and/or corporate income tax) during the given tax year.

Turnover tax (also known as sales tax) is a tax paid on a business's annual sales turnover (income).

It is a prescribed tax payment procedure within which the main tax paid is the turnover tax.

To operate under this system, your previous year's or expected income should not exceed 115 million AMD (approximately 280,000 USD).

In this system, the turnover tax replaces the value-added tax (VAT) and/or profit tax for commercial organizations and the VAT for individual entrepreneurs and notaries.

• Individual entrepreneurs
• Resident commercial organizations
• Notaries

You cannot operate under turnover tax if:

• You are considered an affiliated entity, except for cases where affiliated entities
  • Have submitted a statement of cessation of activity to the tax authority.
  • Do not carry out activities.
• Your sales turnover exceeded 115 million AMD in your current or previous tax year.
• You have violated the rules for operating cash registers during the tax year for the 3rd time.
• You may be a party to a joint activity or supply of goods - a commission or an agency agreement on the condition of acting on behalf of an agent for the supply of goods.
• You operate as a bank, credit, investment fund, fund manager, insurance, a specialized participant in the securities market, pawnshop, organizer of payments and settlements, casinos, games of chance, totalizer, and Internet totalizer, engaged in the purchase and sale of foreign currency, auditing or investment company.

The turnover tax rate depends on the type of your business activity, as follows:

• Trading activities: 5%
• Manufacturing activities: 3.5%
• Sale of secondary raw materials (waste and batteries): 1.5% (included in the list established by the Government of the Republic of Armenia)
• Rent payments, interest, royalties (income from intangible property), alienation of real estate: 10%
• Notary activities: 10%
• Alienation of newspapers by editorial offices: 1.5%
• Other activities or alienation of assets: 5%
• Activities carried out in the public catering sector: 6%
• Alienation of other assets and other activities not included in the classifier of economic activities "56 Public catering" in the public catering sector: 20%
• Organization of lotteries: 25%

You will be responsible for paying any taxes not replaced by the turnover tax (if applicable to your activities):

• Excise tax on activities in the public catering sector.
• VAT in the case of importing goods into the Republic of Armenia under the customs procedure "Release for Domestic Consumption" or importing goods from the Eurasian Economic Union (EAEU) member states with the status of goods into the Republic of Armenia.
• Income tax.
• Environmental and road tax.
• Property tax on vehicles.
• Land tax and property tax.
• Profit tax in the amount of 5,000 AMD per month, which individual entrepreneurs and notaries pay until April 20 of the year following the given tax year.
• Non-resident profit tax (paid by tax agents).

Attention
As a turnover taxpayer, you will be exempt from profit tax prepayments. As a tax agent, you will be exempt from paying 20% income tax on goods purchased with unsubstantiated documents.

You can reduce your tax amount by 4% of documented expenses, but the tax amount calculated for the reporting period cannot be less than 1.5% of the income from commercial activities for the same period.

You can include in expenses the amounts of customs duties, VAT, excise tax, and/or environmental tax paid for goods purchased or imported for direct sale.

The unreduced part of the commercial activity tax amount can be reduced in subsequent quarters.

This will become clearer with these examples:

Example 1

• You are engaged in the trade of local and Chinese-made toys and during the quarter
  • You purchased 2,000,000 AMD from the local market.
  • You imported 6,000,000 AMD (=customs value + customs duty + VAT) worth of toys from China. 
• The expenses for traveling to China and living expenses are 650,000 AMD. 
• The turnover for the quarter (the amount received from the sale of toys) was 10,000,000 AMD. 
• Considering the 5% turnover tax rate for your activity, the amount will be 500,000 AMD (0.05*10,000,000). 
• Your turnover tax can be reduced by
  • 6,000,000 AMD (costs of goods imported into the Republic of Armenia)
  • 2,000,000 AMD (costs of goods purchased in the Republic of Armenia)
  • By 4% = (2,000,000 + 6,000,000) * 0.04 = 320,000 AMD. 
  • The final amount to be paid will be 500,000-320,000 = 180,000 AMD (> 150,000 = 0.015*10,000,000).

Example 2

• You are engaged in the purchase and sale of household goods.
  • You imported goods from Germany worth 9,250,000 AMD (=customs value + customs duty + VAT). 
• The turnover for the quarter (the amount received from the sale of goods) was 10,000,000 AMD. 
• The expenses for traveling to Germany and staying there amounted to 450,000 AMD. 
• Considering the turnover tax rate of 5% for your activity, the payment amount will be 500,000 AMD (0.05*10,000,000). 
• It is possible to reduce it by
  • 9,250,000 AMD (expenses on imported goods in the Republic of Armenia)
  • By 4% = 9,250,000 * 0.04 = 370,000 AMD. 
• After the reduction, the amount of tax payable should have been 500,000-370,000 = 130,000 AMD, but since this amount is less than 150,000 drams (1.5% of the turnover of 10,000,000 AMD), the final amount will be 150,000 AMD.
• At the same time, the amount payable in the next quarter will be reduced by the difference of 20,000 AMD recorded in the previous quarter (=150,000-130,000).

• If the expenses of the public catering sector are documented, the tax amount can be reduced by 3% of the expenses substantiated by documents, but the calculated tax amount cannot be less than 4% of the income.

• The expenses include the amounts of customs duties, VAT, excise tax and/or environmental tax paid for purchased or imported goods.

• The expenses do not include the costs of:

  • Acquiring or constructing fixed assets.
  • Capital and current expenses on fixed assets.
  • Depreciation parts of fixed assets and intangible assets.
  • Acquiring other assets that are not culinary products in the event of their alienation. 

In this case, the unreduced part of the tax amount cannot be reduced in the following quarters.

Example

You have a restaurant business. You bought a restaurant hall for 30,000,000 AMD, and the renovation costs of the hall amounted to 4,000,000 AMD.

• During the quarter, you purchased fruits, vegetables, meat, and oil worth 3,000,000 AMD.
• The purchase of dishes during the quarter amounted to 300,000 AMD
• The newly purchased kitchen gas stove - 60,000 AMD.
• Utility payments during the quarter amounted to 120,000 AMD. 

The turnover for the quarter (the revenue from the sale of culinary products) amounted to 8,000,000 AMD. Considering the 6% turnover tax rate for your activity, the amount subject to tax will be 480,000 AMD (0.06*8,000,000).

• The tax amount can be reduced by 11.3% of (3,000,000+120,000) AMD = 3,120,000*0.03 = 93,600 AMD. 
• The final amount of turnover tax payable will be 480,000-93,600=386,400 AMD (> 0.04*8,000,000=320,000 AMD).

• Turnover tax, the rate of which will depend on the type of your activity.
• Profit tax of 5,000 AMD per month, which you must pay by April 20 of the year following the given tax year.
• Environmental, real estate, or vehicle property tax, if necessary.
• Income tax.

Excise tax in the turnover taxation system is paid exclusively when engaged in production in the territory of the Republic of Armenia.

If you are an employer, you will pay:

• Income tax of 5,000 AMD per month for each employee until the 20th of the month following the given month
• Stamp duty
• Social security contribution

You will pay:

• Turnover tax, depending on the type of activity.

For example:

• In the case of commercial activities, you will be taxed at a rate of 5%, which can be reduced to 1.5%
• In the case of manufacturing activities - 3.5%
• In the case of services - 5%

In cases where necessary:

• Environmental, real estate, or vehicle property tax:

If you are an employer:

• Income tax
• Social Security Contributions
• Stamp duty

The turnover (sales) tax report is submitted quarterly, by the 20th of the month following each reporting quarter, inclusive.

Attention
In addition to turnover tax, you will also submit reports on other taxes related to your activity: for example, if you are an excise taxpayer, a joint report on excise tax and VAT, etc.

If you do not submit the turnover tax report by the 20th of the month following the quarter, inclusive, you will be charged a fine (also in the form of an inspection report) in the amount of 5% of the total tax amount calculated for each subsequent 15 completed days (regardless of whether the 15th day is a non-working day).

It is a prescribed procedure for calculating and paying taxes. When you choose this system, you are exempt from the obligation to pay turnover, profit, and value-added taxes. You only pay taxes determined by the specifics of your activity.

The main condition for choosing this type of taxation is that your previous calendar year or expected income (sales turnover) for all types of activity does not exceed 24 million drams.

• Individual entrepreneurs
• Resident commercial organizations
• Natural persons

To operate under this taxation system, it is important to know that you cannot choose it if:

• You are considered an affiliated entity, except for cases where affiliated entities
  • Have submitted a statement of cessation of activity to the tax authority.
  • Do not carry out activities.
• You are a party to a joint venture agreement, a goods supply commission, or an agency agreement providing for the provision of goods on behalf of an agent.
• You are a company engaged in purchase and sale activities that have carried out transactions to supply goods to organizations or individual entrepreneurs.
• You receive rental payments, interest (except for interest accrued on the positive balance of the current account in the servicing bank), and royalties.

You should also not be:

• An organization engaged in purchase and sale activities in trade venues, shopping centers, and fairs within or outside the administrative boundaries of the city of Yerevan or engaged in purchase and sale activities in the framework of personal use cars or e-commerce.
• Bank, credit, investment fund, fund manager, insurance, a specialized participant in the securities market, pawnshop, organizer of payments and settlements, casinos, games of chance, totalizer and Internet totalizer, engaged in purchasing and selling foreign currency, auditing or investment company.
• Consulting, legal, accounting, auditing, engineering, advertising, design, marketing, translation, expert, medical, dental technical services, information processing (including information collection and generalization) and transmission (communication), scientific research, experimental-constructional and experimental-technological works, carrying out activities in the field of public catering within the administrative boundaries of the city of Yerevan, as well as other works similar to the above works or services or providing services.

Attention
Although there are many types of activities in which you cannot choose the micro-enterprise taxation system, there are important exceptions, so you should be guided by the Tax Code of the Republic of Armenia (the law can be found at arlis.am).

For example:

• Companies operating in the public catering sector cannot choose this system, but public catering providers directly linked to hotel services through tourist houses can.
• Those engaged in wholesale and retail trade cannot, but shops and kiosks outside Yerevan can.

You can carry out certain types of activities without registering as a sole proprietorship or legal entity by obtaining a Taxpayer Identification Number (TIN). These types are:

• Hostel (tourist house) services
• Language courses, private preparatory or other professional courses
• Dancing and singing courses
• Performing arts and other related auxiliary activities
• Creative activities
• Party hosts activities
• Activities in the field of educational, extracurricular gymnastics, and sports
• Household services
• Blacksmith services
• Repair of watches, chronometers, and musical instruments

Work performed on behalf of individuals:

• Manufacture and repair of shoes, leather, and other similar products
• Manufacture and repair of clothing and hats
• Manufacture and repair of carpets and rugs
• Manufacture of wooden products, repair of furniture and home furnishings
• Manufacture and repair of non-precious jewelry
• Repair of computer equipment, televisions, washing machines, air conditioners, and other household appliances, software maintenance.
• Manufacture of bicycles and wheelchairs, repair of personal and household products
• Manufacture of household and ceramic and other porcelain products
• Pewter industry

For a sole proprietorship:

• Stamp duty
• Road tax if there is a vehicle registered with the sole proprietorship

For employees:

• Income tax of 5,000 AMD per month for each employee
• Social security contributions, if employees are social security payers
• Stamp duty, if employees were born after 1974

You will not pay profit tax, VAT, or turnover tax. You are also exempted from the obligation to calculate and pay taxes as a tax agent, except for the aforementioned 5,000 AMD monthly income tax. You will also not make profit tax prepayments.

You will pay:

• Income tax
• Social Security contributions for each employee, if the employee is a social security payer
• Stamp duty for each employee, according to the established rates
• Excise tax, if you are engaged in an activity subject to excise tax
• Dividend tax, since LLC shareholders must declare their dividends and pay a 5% dividend tax

Example

• Suppose the shares of the LLC belong to you and your wife in a ratio of 60% and 40%.
• Your profit for the month was 50,000 AMD.
• As a micro-entity, you are exempt from profit tax.
• According to your dividend, 30,000 AMD of the profit is distributed to you, and 20,000 AMD to your wife.
• The 5% dividend tax applies to these amounts.
• As an individual, you will need to declare the income received from the dividend and pay 1,500 AMD (5% of the 30,000 AMD dividend) to the state budget, and your wife will pay 1,000 AMD (5% of the 20,000 AMD dividend).
• Payment is made annually and only in the event of actual distribution.

You must submit an annual report for each reporting year by February 1 of the following year.

You must also submit other reports depending on your activity, according to the following deadlines and types:

• Income tax calculation for your employees by the 20th of the month following each reporting month
• Unified calculation of value-added tax (VAT) and excise tax by the 20th of the month following the reporting month, if you are an excise taxpayer
• Unified tax calculation of environmental tax and natural resource use fees, if you pay these taxes
• Unified calculation of VAT and excise tax reflecting the amount of separate VAT in case of erroneously issuing a tax invoice

This is a tax payment system where the primary taxes will be Value Added Tax (VAT) and/or Profit Tax.

The choice of the general taxation system depends on the circumstances in which it is not possible or desirable to choose other types of taxes. In particular:

• The given activity must be subject to value-added tax (VAT).
• No statement on choosing another system was submitted to the tax authority within 20 working days after the state registration of the business.
• The annual turnover of the business exceeded the value-added tax (VAT) threshold of 115 million AMD.
• The application of the general system is more convenient for cooperation with partners.

Value-added tax is 20% of the value added to the purchase price of a product or service, which must be paid to the state budget as VAT.

• Commercial and non-commercial organizations
• Individual entrepreneurs and notaries

You will be considered a value-added taxpayer if:

• Your sales turnover in the previous year exceeded 115 million AMD.
• You applied to be considered a VAT payer within 20 days of January 1 of the current year.
• You did not apply to operate under turnover or micro-entrepreneurship taxes by February 20.
• You cannot be considered a micro-enterprise and turnover taxpayer from January 1 of the current year.

Please note that:

• If your turnover during the year when operating under other taxation systems exceeds the VAT threshold (115 million AMD), you will be considered a VAT payer, which will be calculated only for the part exceeding the VAT threshold.

• If you are an individual entrepreneur or a natural person who is not a notary, you are obliged to pay VAT when importing goods into the territory of the Republic of Armenia for business purposes.

• Supply of goods, if the place of supply is Armenia.
• Performance of work and/or provision of services.

Including:

• Alienation of an intangible asset.
• Provision of use of an intangible asset.
• Importing goods into the Republic of Armenia under the customs procedure "Release for Domestic Consumption"
• Importing goods from the Eurasian Economic Union (EAEU) member states with the status of goods into the Republic of Armenia.

The following are exempt from VAT:

• Providing educational services and performing scientific research work by educational institutions and art centers.
• Alienation of children's and school literature, scientific and educational publications, newspapers, and magazines.
• Services related to the care of persons in preschool institutions, boarding schools, orphanages, institutions caring for children with disabilities or the disabled, and nursing homes.
• Certain financial operations and services performed by banks, specialized securities market participants, payment and settlement organizations, and credit organizations.
• Alienation of prosthetic and orthopedic devices, medical equipment, and medical products, provision of medical assistance and maintenance services.
• Gratuitous supply of goods, gratuitous performance of works, and/or gratuitous provision of services by public, charitable, and religious organizations.
• Transactions carried out within the framework of programs qualified as charitable by the procedure established by the Code.
• Provision of insurance and reinsurance services.
• Providing services related to death and funerals and performing other works of a ritual nature. Provision of services and disposal of relevant supplies and certain other types of activities defined by the Law.

• In retail activities, if the tax amount is included in the price of the goods, work, or service, VAT is calculated at 16.67% of the total value of the goods, work, or service.
• For example, the 0% VAT rate is often applied when goods, work, or services are exported or purchased in Armenia by diplomatic and equivalent organizations.

The value-added tax report is submitted in a single calculation with the excise tax, every month, by the 20th of the month following each month, inclusive.

Corporate income tax is a tax paid on a business's annual profit. Profit is the positive difference between revenue and expenses.

• Resident organizations (state-registered in the Republic of Armenia)
• Individual entrepreneurs
• Notaries and contractual investment funds
• Non-resident organizations (registered in other countries or international), as well as organizations established by them outside the Republic of Armenia.

Organizations producing agricultural products are exempt from paying profit tax by the law of the Republic of Armenia until December 31, 2024.

Residents pay income tax on taxable income received within the territory of the Republic of Armenia and outside its borders, while non-residents pay income tax on taxable income generated from sources located in Armenia.

Taxable income is the positive difference between gross income (the sum of all income received in the reporting year, regardless of the sources of income) and deductions specified by law.

Moreover, the same amount is deducted from gross income only once.

The following are not considered income:

• Funds pooled for joint activities.
• Tax privileges.
• Mandatory payments and duties paid to state or municipal budgets.
• Amounts of privileges granted for natural resource usage payments, foreign currency, and assets and liabilities expressed in foreign currency.
• Positive results of revaluation of fixed assets carried out by the procedure established by law.
• Assets, services received gratuitously by non-profit organizations, etc.

Resident and non-resident organizations of the Republic of Armenia (in terms of taxes generated through income attributable to a permanent establishment) must pay an 18% profit tax.

Individual entrepreneurs and notaries operating under turnover or micro-enterprise taxes for these types of activities - 5,000 AMD.

Non-resident organizations operating in the Republic of Armenia without a permanent establishment and receiving income from RA sources pay profit tax at the following rates:

• Increase in the value of assets received from the alienation of securities: 0%
• Income from insurance compensations, reinsurance payments, and transportation freight: 5%
• Passive income: 10%
• Dividends: 5%
• Income from RA sources: 20%
• Payments made for the purchase of goods from organizations registered in offshore zones if the result is not received within 365 days following the payment date: 20%.

Non-resident profit taxpayers operating in the Republic of Armenia through a resident or permanent establishment are obliged to make profit tax prepayments for each quarter of the current tax year, by the 20th of the last month of the given quarter inclusive, in the minimum amount of 20% of the profit tax amount of the previous tax year and 2% of the income of the previous quarter.

The following do not make an advance payment:

• Taxpayers who received state registration during the tax year - for the quarters of the tax year of their state registration.
• Those who were not considered VAT payers during the previous tax year, as well as VAT payers in the current tax year - for the given tax year, in case of submitting a statement on the cessation of activity - for the quarters included from the date of cessation of activity to the date of resumption.

Income tax reports are filed annually. In addition, individual entrepreneurs and notaries operating in micro-enterprise or turnover tax systems submit annual reports and pay a monthly profit tax of 5,000 AMD.

 An LLC or sole proprietorship opened to produce tomatoes in a greenhouse in 2024.

• The profit (corporate income) will be 256,608,000 AMD (from the sale of tomatoes produced in a greenhouse).
• The expenses will be 173,942,776 AMD. 
• The profit will be 82,665,224 AMD.

The profit tax paid to the state budget of the Republic of Armenia in the case of such figures would amount to 14,877,940 AMD. 

Special note: according to the law of the Republic of Armenia, agricultural producers are exempt from paying profit tax until December 31, 2024. 

Therefore, the LLC or sole proprietorship engaged in tomato production will not pay the 14,877,940 AMD mentioned in the above example.

Excise tax is a tax levied on:

• The import of goods subject to excise tax into the Republic of Armenia.
• The sale of such goods within the Republic of Armenia by their producers.

Excise tax is imposed on alcoholic beverages, tobacco products, and petroleum products.

• Supply of goods subject to excise duty, manufactured or packaged, if the place of supply is the Republic of Armenia.

• Import of goods subject to excise duty into Armenia under the customs procedure "Release for Domestic Consumption".

• Import of goods subject to excise duty from the EAEU member states to Armenia, having the status of EAEU goods.

• Supply of compressed natural gas at a gas filling station (including consumption of compressed natural gas for domestic needs by the taxpayer operating the station).

• Beer
• Grape and other wines
• Alcohol (except brandy alcohol obtained from grape must) and alcoholic beverages
• Industrial tobacco substitutes, cigars, cigarillos, and cigarettes with tobacco or its substitutes
• Gasoline, crude oil and petroleum products, diesel fuel, petroleum gases, and other gaseous hydrocarbons (except natural gas).
• Motor vehicles with a value or year of manufacture and engine capacity specified by law and motor oils.

• Importers of goods subject to excise tax
• Manufacturers or sellers of goods subject to excise tax in Armenia (including those who bottle, package, or otherwise prepare them for sale).

The following should be kept in mind:

Regardless of state registration status, people in the Republic of Armenia who produce, prepare, or bottle goods subject to excise tax under contracts concluded with them or from raw materials they provide are obligated to calculate and pay excise tax themselves as the customer.

If the right to dispose of goods transferred to the pledgee as a pledge passes to the pledgee in accordance with the procedure established by law, the pledger shall bear the obligation to pay excise tax if he/she is a taxpayer.

Natural persons pay excise tax if they import goods exceeding the value or corresponding dimensions established by the Government of the Republic of Armenia or alienate goods subject to excise tax in the territory of the Republic of Armenia.

Excise tax is determined by applying excise tax rates to the quantity, price, customs value, or volume of the excise tax-exempt product, which can be found in Article 88 of the Tax Code of the Republic of Armenia.

• In case of a delay in the payment of excise tax beyond the established deadlines, a penalty of 0.04% is calculated for each day of delay. The penalty is applied to the amount of unpaid taxes for the entire period after the payment deadline, but not exceeding 730 days.
• In case of late submission or failure to submit the relevant calculations to the tax authority, a penalty of 5% of the total tax amount is applied for each 15-day period following the deadline. The total amount of penalties shall not exceed the total amount of tax.
• In cases where the amount of excise tax submitted for each reporting period is less than the amount calculated in the prescribed manner, the difference between the submitted amount and the amount calculated in the prescribed manner is charged as excise tax, along with a penalty of 50% of that difference. Applying this penalty has some peculiarities, which you can find in Article 403 of the Tax Code.

The following must be submitted to the tax authority by the 20th day of the month following the month in which the goods were imported into the Republic of Armenia (crossed the state border of the Republic of Armenia):

• Import tax declaration
• A declaration on the import of goods and the payment of indirect taxes (or exemption from indirect taxes, payment of indirect taxes in another manner).

These documents shall be submitted to the tax authority by the 20th day of the month following the month in which the goods were alienated to the buyer or the ownership rights to them were transferred to the buyer if:

• Goods are imported based on assignment, commission, or agency contracts by a resident of another EAEU member state, a permanent establishment in the Republic of Armenia, or a participant in a fair held in the Republic of Armenia.
• The buyer's ownership of the goods imported into the Republic of Armenia shall subsequently pass to the buyer on the territory of the Republic of Armenia.

Excise stamps and labels are self-adhesive signs of a specified size and shape, protected from counterfeiting. They are marked "Local" or "Imported" to indicate the origin of the goods: manufactured in Armenia or imported into Armenia.

These signs contain the abbreviated name of the product, a serial and sequential number, or a control identification mark. This information allows for the identification of the manufacturer or importer of the stamped product.

Organizations and individual entrepreneurs who sell goods subject to excise stamping:

• Imported from non-EAEU member states to the Republic of Armenia.
• Under the "Release for Domestic Consumption" customs procedure.
• Imported from EAEU member states, produced in Armenia.

Alcoholic beverages and tobacco products.

In addition:

• In the case of undenatured ethyl alcohol with an alcohol content of 80% by volume or more, denatured ethyl alcohol of any density, and other alcoholic beverages, an excise stamp is mandatory in containers with a capacity of up to 5 liters.
• Beverages packaged in containers with a capacity of up to 0.05 liters (grape wines, other fermented beverages, alcoholic beverages with an alcohol content of up to and including 9%) are not subject to excise stamping.

You can find more detailed information about this in Article 389 of the Tax Code of the Republic of Armenia.

• Meat products, poultry, fish
• Dairy products, coffee, tea
• Types of fats, oils, greases
• Prepared foods, canned goods
• Vitamins, medicines
• Dyes, petroleum products, varnishes
• Cosmetics and hygiene products, soap

A more detailed list of the mentioned products can be found in Article 390 of the Tax Code of the Republic of Armenia.

• Goods subject to marking, imported into the Republic of Armenia by individuals as accompanying baggage, not exceeding the value, nature, and quantity limits established by the customs legislation of the EAEU and the Republic of Armenia.
• Goods subject to stamping exported from the territory of the Republic of Armenia by legal entities and individual entrepreneurs, as well as goods subject to stamping intended for sale in a duty-free shop.
• Goods imported into the Republic of Armenia by diplomatic missions, consular offices, and equivalent international organizations accredited in the Republic of Armenia are subject to stamping. This stamping, however, is conducted in accordance with established procedures and requires prior consent from the customs authority.

• The excise stamp or label shall be affixed to the product subject to stamping.
• An undamaged, complete excise stamp and/or label shall be affixed, the electronic records of which shall correspond to the type, subtype, and product description subject to stamping.

The rules for marking products (including the marking location on each product type or package or any other container subject to marking) are established by the Resolution of the Government of the Republic of Armenia dated 06.07.2017 N773-N.

• Producers of goods subject to stamping shall obtain the stamps from their registered tax inspectorate, and importers shall obtain them from their registered customs office before the alienation of such goods.

• Excise stamps and labels shall be issued based on an application submitted electronically within three working days after the application is submitted. In addition, the report on using previously received excise stamps and stamps shall be considered.

• Stamps and labels shall be issued free of charge.

Important Considerations

• Before the alienation of goods, registrations, and adjustments must be made electronically.

• Turnover or micro-enterprise taxpayers may not make these registrations if the data subject to registration (except for the series and serial numbers of the stamps to be provided) is indicated in the application for receiving stamps.

• Before the alienation of goods, they may adjust the data indicated in the application for receiving stamps previously submitted by electronic registrations.

• Unused excise stamps and labels must be returned to the tax authority within six months of the month of receipt (this period may be extended by a maximum of 90 days).

• In case of damage, they are returned at the end of each semester, up to and including the 20th of the month following the semester.

To get a refund, you must submit an application to the tax authority

After applying, within 10 working days, the compliance of the damaged excise stamps and labels with the established requirements is checked, and a decision is made, of which the taxpayer is notified within 2 working days.

Fines are provided for:

• Delaying the return of unused (including lost) or damaged excise stamps and labels beyond the established deadlines
• Violating the stamping rules
• Alienating excise stamps and labels
• Stamping goods with illegally acquired excise stamps or labels
• Selling unstamped goods subject to stamping

• For goods imported into the Republic of Armenia under the customs procedure "Release for Domestic Consumption" or the import of goods into the Republic of Armenia from the EAEU member states.

For goods imported by organizations and individual entrepreneurs selected by the government within the framework of investment programs, the VAT payment period is postponed for three years after the expiration of the period.

• Goods included in the list approved by law, imported by organizations and individual entrepreneurs considered VAT payers, which are not subject to excise tax.

• The supply of goods, performance of works, and provision of services that are exempt from VAT.

• In the case of imports from non-EAEU member states, the customs value of the goods is taxed.
• In the case of imports from EAEU member states, the acquisition cost of the imported goods.
• In the case of imports from non-EAEU member states, the customs duty is also included in the tax base.
• In the case of goods subject to excise tax, the excise tax is also included in the tax base.

In Addition:

The tax authority has the right to review the size of the tax base and apply the "real value" of the transaction if it finds that the tax base has been reduced for certain reasons.

Environmental taxpayers are organizations and individuals carrying out activities or functions subject to environmental tax.

The following are subject to environmental tax:

• Emission of harmful substances into the atmosphere
• Leakage of harmful substances and/or compounds into water resources.
• Placing or storing subsoil use, production, and/or consumption waste in specially designated places.
• Importing environmentally harmful goods into the territory of the Republic of Armenia and their disposal by importers-sellers and/or producers-sellers in the territory of the Republic of Armenia.

The reporting period for the calculation and payment of the environmental tax is each reporting quarter, except for:

Environmental tax calculated for the emission of harmful substances into the atmospheric air from motor vehicles entering the Republic of Armenia by means of vehicles not registered in the Republic of Armenia, which is paid for each entry into the Republic of Armenia upon entry into the Republic of Armenia.

Environmental tax calculated for the emission of harmful substances into the atmosphere from motor vehicles, other self-propelled vehicles and mechanisms, as well as watercraft registered and operated in the Republic of Armenia

• For vehicles subject to technical inspection:
  • The tax is paid before their technical inspection.
• For vehicles not subject to technical inspection:
  • The tax is paid by December 1st of the given tax year.

Environmental tax calculated for environmentally harmful goods imported into the Republic of Armenia, 

• In the case of import from the EAEU member states
  • It's paid to the state budget by the 20th of the month following the month covering the day of actual import of these goods into the territory of the Republic of Armenia (crossing the state border of the Republic of Armenia)
• In the case of import from non-EAEU member states
  • It's paid by registering the customs declaration under the customs procedure "Release for Domestic Consumption" or at the time of registration, but no later than the release of the goods.

In the case of the above exceptions, unified tax calculations for environmental tax and nature use fees are not submitted.

Real estate tax is a tax paid on real estate, including land and buildings, owned by taxpayers by right of ownership. This type of tax does not depend on the type or results of the taxpayer's economic activity.

Legal entities and individuals pay a real estate tax. Exceptions are state bodies, community management institutions, the Central Bank of the Republic of Armenia, as well as owners of apartments and (or) non-residential premises in an apartment building if they own the land plot necessary for the maintenance and upkeep of the apartment building (including the land under the building) by common share ownership.

Real estate: Land plots, underground and above-ground buildings, structures, and structures built on land plots.

Regardless of the existence of ownership rights, real estate tax must be paid even if the property has not yet been registered:

• For land provided for permanent use that is state property

• For newly constructed and (or) modified real estate that is registered and assessed by the real estate cadastre body

• For buildings and structures built on that land by taxpayers with the right to own the land, including unauthorized structures in apartment buildings or adjacent buildings.

• The lessee is considered the taxpayer of the real estate subject of leasing.

Real estate tax is due:

• From the 1st of the month following the month of state registration of ownership or permanent use right to the taxable object or part thereof.

Real estate tax calculation ceases from the 1st of the month following the month of termination of ownership or permanent use right.

Organizations pay real estate tax every six months, up to and including June 1 of the tax year. The tax is paid to the budget of the municipality where the real estate is located.

Vehicle property tax is a tax paid on vehicles owned by taxpayers. It does not depend on the type or results of the taxpayer's economic activity.

The following vehicles are subject to this type of property tax:

• Automobiles
• Motorized watercraft
• Motorcycles
• Snowmobiles
• Quadricycles

Vehicle property tax is paid by organizations and individuals, except state bodies, community management institutions, and the Central Bank of the Republic of Armenia.

If the object of taxation is a leasing object, then the lessee is considered the payer of vehicle property tax.

The basis for calculating vehicle property tax is:

• The power of the traction engine of a given vehicle (horsepower or kilowatts)
• In the case of more than one traction engine, the total power of all traction engines is taken into account, which is multiplied by the relevant rates established by Article 244 of the Tax Code of the Republic of Armenia, also taking into account privileges.

The reporting period for the calculation and payment of vehicle property tax is each reporting year.

Road tax is a tax paid in Armenia for using highways by unregistered heavy vehicles or for placing advertisements on public state highways.

The purpose of paying the tax is to provide the necessary funds for the development, construction, repair, and maintenance of the highway network in Armenia.

You will pay road tax if:

• You enter Armenia (including from the EAEU member states) with freight vehicles not registered in Armenia (except for vehicles registered under the “Release for domestic consumption” customs procedure),
• You place advertisements on state highways of Armenia for general use (including transit sections passing through the administrative borders of communities), as well as on the alienation layers and protective zones of these roads.

The road tax for using motor roads is calculated for every 15 days of entry into the Republic of Armenia, according to the maximum permissible mass of the motor vehicle, as follows:

• Up to 1.5 tons inclusive: 15,000 AMD
• More than 1.5 up to 3 tons inclusive: 25,000 AMD
• More than 3 up to 5 tons inclusive: 40,000 AMD
• More than 5 up to 10 tons inclusive: 65,000 AMD
• More than 10 up to 20 tons inclusive: 80,000 AMD
• More than 20 up to 30 tons inclusive: 110,000 AMD
• More than 30 up to 44 tons inclusive: 152,000 AMD
• More than 44 up to 60 tons inclusive: 205,000 AMD
• More than 60 up to 70 tons inclusive: 233,000 AMD
• More than 70 up to 80 tons inclusive: 285,000 AMD
• More than 80 up to 90 tons inclusive: 318,000 AMD
• More than 90 up to and including 100 tons: 603,000 AMD
• More than 100 tons: 753,000 AMD

The road tax for placing advertisements on public roads is calculated as follows:

• For each square meter of the surface area of ​​an advertising board placed on interstate highways: 10,000 AMD.
• For each square meter of the surface area of ​​an advertising board placed on republican and regional highways: 7,500 AMD.

Also included are transit sections passing through the administrative borders of communities and the alienation layers and protective zones of these roads.

State duty is a mandatory payment for services or other activities provided within the scope of the powers of state bodies. It is paid to the state and (or) community budgets of the Republic of Armenia by individuals and legal entities.

All individuals and legal entities are required to pay a state duty for the use of services or activities provided for by law.

State duty is charged for the following services or activities:

• Submission of claims, applications, and complaints to the court, appeals and cassation appeals against court judicial acts, and copies (duplicates) of documents issued by the court.
• Performance of notarial actions by a notary.
• Registration of civil status acts, issuance of duplicate certificates to citizens, certificates of amendments, supplements, corrections, and restoration of entries made in civil status acts.
• Obtaining RA citizenship and changing RA citizenship.
• Performance of consular services or actions.
• State registration.
• Issuance of a certificate of the right to export cultural values.
• Legally significant actions related to the legal protection of inventions, utility models, industrial designs, trademarks, geographical indications, appellations of origin, and guaranteed traditional products.
• Firm names (objects of industrial property), topologies of integrated microcircuits.
• Legally significant documents issued to individuals, specific services, or provision of activities.
• Issuance of licenses to carry out activities subject to licensing.
• Acquisition of the right to engage in activities subject to notification in cases specified by law.

The following are exempt from environmental tax for emitting harmful substances into the atmospheric air from motor vehicles registered in Armenia:

• Individuals with disabilities who have received vehicles under preferential conditions from social security bodies - for those vehicles.
• Payers of environmental tax for vehicles powered by hybrid and electric engines - for those vehicles.
• Payers of environmental tax for vehicles temporarily deregistered with the authorized registering body - for vehicles deregistered throughout the year.

The following are exempt from environmental tax for emissions of harmful substances into the atmospheric air from motor vehicles not registered in Armenia:

• Diplomatic missions and consular posts accredited in the Republic of Armenia and international organizations equivalent to them.
• Those carrying out transportation within the framework of humanitarian aid and charitable programs in the Republic of Armenia.
• Armed Forces of the Russian Federation.

For imported goods that cause environmental damage, those transporting these goods in transit through the territory of Armenia are exempt from the environmental tax.

Individuals are exempt from the environmental tax for placing and/or storing production and/or consumption waste in specially designated places.

The following are exempt from paying road tax for using the roads of the Republic of Armenia with freight vehicles not registered in the Republic of Armenia:

• Foreign diplomatic missions and consular offices accredited in the Republic of Armenia for their official use of freight vehicles.
• Humanitarian and technical assistance to the territory of the Republic of Armenia by means of freight vehicles and road taxpayers transporting goods within the framework of charitable programs for such transportation.
• Road taxpayers who carry out transportation by truck to military bases of the Russian Federation located in the Republic of Armenia for such transportation.
• Road taxpayers entering the Republic of Armenia with freight vehicles registered in the territory of Georgia and carrying out transportation in the territory of the Republic of Armenia, except for the road tax established by this section for motor vehicles with a maximum permissible mass exceeding 44 tons.
• Road taxpayers who benefit from road tax benefits in accordance with international agreements.
• Vehicles entering the Republic of Armenia with freight vehicles registered in the territory of the Islamic Republic of Iran if they must be located within a maximum distance of one kilometer from the border of the Republic of Armenia and the Islamic Republic of Iran, in areas under customs control, throughout their entire entry into the Republic of Armenia.

Organizations and private enterprises can benefit from tax exemption if they carry out activities in the following border communities:

• Ararat region (Yeraskh, Paruyr Sevak villages)
• Vayots Dzor region (Khachik, Khndzorut, Sers, Nor Aznaberd, Bardzruni villages)
• Gegharkunik region (Chambarak city, Vahan village, Tavush, Berd city, Nerkin Karmir Aghbyur, Voskevan, Choratan, Koghb, Vazashen, Berkaber, Chinari, Artsvaber, Tsaghkavan (Ijevan region), Mosesgegh, Dovegh, Paravakar, Berdavan, Barekamavan, Koti, Baghanis, Sarigyugh, Aygedzor, Kirants, Aygepar, Sevkar, Aygehovit, Voskepar, Verin Karmir Aghbyur, Azatamut villages)

Attention
Regardless of whether you register a company/private enterprise in a border community or outside it, it is important that it carries out its activities in that community, for which you must fill in the “Place of Business” section when registering the company with an address that is located in one of the border communities included in the list. That is, to take advantage of the tax benefits, it is possible, for example, to register a company/private enterprise in Yerevan, which will carry out its activities (for example, production) in the city of Berd.

Businesses operating in border communities are exempt from a number of state taxes paid on their activities, as follows:

Organizations and individual entrepreneurs are exempt from value-added tax (VAT), profit tax, and turnover tax.

They pay:

• Excise tax on a general basis.
• Profit tax of 5,000 AMD per month for legal entities.
• Income tax for employees and individual entrepreneurs also for themselves if they are registered employees.
• Social security contributions and stamp duty.

The following exceptions apply:

• Activities carried out in retail trade and public catering to the population through trade facilities and sales outlets in places of trade, with an annual turnover exceeding 115 million AMD, are subject to 20% VAT.
• The production of goods subject to excise tax is taxed in general.
• 18% profit tax.

There is no need to submit an application to take advantage of these tax benefits.

A necessary condition is to be a turnover taxpayer.

If you have specified one of the relevant border communities as the place of operation when registering your business, you can automatically take advantage of the tax benefits available under the Law "On Tax Exemption of Activities Carried Out in Border Settlements".