[ armenia - individual taxation ]

Residence and Scope

According to the Law on Income Tax residents of the RA and non-residents are liable to income tax. Residents are taxed on their worldwide income and non-residents are taxed on income from Armenian sources only.

Individuals are considered to be resident in Armenia if they are physically present for 183 days or more in any consecutive twelve-month period commencing or ending in the tax year. Individuals whose center of vital interests is in Armenia, as well as those in the civil service of the Republic of Armenia outside the country are also considered as residents. Individuals who do not meet these conditions are non-residents.

Determination of Taxable Income

Taxable income is the positive difference between the gross income and deductions allowed under the Income Tax Law.
Gross income is the total income derived by a taxpayer within the reporting year. The following are considered as different forms of income:
  • salaries, wages;
  • dividends, royalties, interest;
  • insurance compensations;
  • monetary and non-monetary gains from lotteries;
  • income derived from business activity;
  • property and cash, received as inheritance;
  • lease payments, as well as income received from other civil and legal contracts;
  • revenue from the sale of property;
  • income received from donations and assistance, etc.
The following are considered as deductions:
  • income of military personnel;
  • grants;
  • property and cash, received as inheritance;
  • dividends;
  • income from realisation of agricultural productions;
  • insurance compensation;
  • amount of allocations provided to religious, public and other non-profit organizations, but not more than 5%of taxable income;
  • scholarship and stipends paid to students;
  • revenue from the alienation of property;
  • monetary and non-monetary gains from lotteries, etc.

Rates

1. Income tax is calculated by a tax agent (employer) on a monthly basis at the following rates:
Monthly taxable income (AMD) Tax rate (%) Cumulative tax (AMD)
0 - 80,000 10
More than 80,000 20 8,000 AMD plus 20% of the amount exceeding 80,000 AMD
2. For annual taxable income, when tax is not taxed by a tax agent, income tax is calculated at the following rates:
Annual taxable income (AMD) Tax rate (%) Cumulative tax (AMD)
0 - 960,000 10
More than 960,000 20 96,000 AMD plus 20% of the amount exceeding 960,000
3. For royalties, leasing and interest income the income tax rate is 10% without taking into account the deductions specified above.

Social Insurance Payments

In addition to the contribution made by employers, every employee must make a contribution of 3% of wages or salaries. This amount is withheld at source by the employer and is deductible for employees to arrive at taxable income.

Personal Allowance

20,000 AMD is deducted from personal monthly gross income before calculating tax.

Returns and Payments

Where a taxpayer's only income is from employment which is subject to withholding tax at source, or the gross income does not exceed 250, 000 AMD per annum, or the income is received from agricultural activity, dividends, or from an activity that is taxed in the form of fixed payments, no tax returns are required. Where there is further tax liability, a return must be completed and filed by 1st March and paid by 1st May of the following year.

Exclusion of Double Taxation

Income tax paid by a resident taxpayer in the RA is reduced by the amount of tax paid by them in foreign countries, with the exception of the amount of tax paid in foreign countries on income that is deductible from gross income pursuant to the legislation of the RA.
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