Taxes and Tax Schemes in Armenia | What You Need to Know in 2025

Armenia, a rapidly developing nation at the crossroads of Eastern Europe and Western Asia, operates a straightforward tax system that has become increasingly attractive to digital nomads and international investors. Located in the South Caucasus region, Armenia combines a growing tech sector with favorable tax policies, making it an emerging destination for foreign professionals and businesses.

Armenia's economy, driven by sectors like information technology, mining, and services, has shown impressive growth in recent years. The country's tax system balances the need for revenue with maintaining attractiveness for foreign investment. Recent reforms have focused on simplifying tax procedures and introducing digital tax services, particularly appealing to the growing tech community.

The expat community in Armenia is expanding, with many professionals drawn to its growing tech sector, affordable living costs, and straightforward tax regime. The tax system, characterized by its simplicity and flat rates, offers various benefits that can be particularly advantageous for foreign residents and digital nomads.

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Armenian Income Tax

Armenia employs a flat income tax system, which makes it particularly straightforward for residents and non-residents alike. As of 2025, the flat income tax rate is 22% for all types of income, including employment, self-employment, and most other sources of personal income.

The system is notably simple with:

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Social security payments are handled through the unified income tax rate, with no additional contributions required from employees.

If you want to have a better understanding of the taxes you should pay on personal income in Armenia, you can use the personal tax calculator in the Taxation section of the Armenia page.

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Armenian Tax on Overseas Income

Armenia's treatment of foreign income follows a worldwide income principle for residents, while maintaining certain exemptions:

• Residents: Taxed on worldwide income
• Non-residents: Taxed only on Armenian-source income

The system includes provisions for avoiding double taxation through an extensive network of international treaties.

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Armenian Tax on Investments

Investment income in Armenia receives straightforward treatment under tax law:

• Capital Gains: Taxed at 22% flat rate
• Dividends: 10% withholding tax
• Interest Income: 10% withholding tax
• Rental Income: Taxed at the standard 22% rate

The system includes special provisions for investment in government securities and certain strategic sectors.

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Armenian Corporate Taxation

Corporate taxation in Armenia is competitive:

• Corporate Income Tax: 18% standard rate
• Small Business Tax: Special regime for businesses with revenue under AMD 115 million
• Value Added Tax (VAT): 20% standard rate
• Turnover Tax: Alternative regime for smaller businesses

The system includes various incentives for IT companies and startups, including potential tax breaks and simplified procedures.

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Special Tax Regimes

Armenia offers several special tax arrangements beneficial to international residents:

IT/High-Tech Benefits: Special tax rates and incentives for IT companies and their employees.

Small Business Regime: Simplified taxation for small enterprises with preferential rates.

Investment Incentives: Tax benefits for large investments in priority sectors.

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Regional Comparison

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Tax Planning for Armenia

Effective tax planning in Armenia requires attention to several key areas:

Residency Status: Understanding the 183-day rule and its implications for worldwide income taxation.

Business Structure: Choosing between standard corporate taxation and special regimes like the IT company benefits.

Documentation: Maintaining clear records for tax purposes, particularly important for international income.