[ armenia - withholding of tax]

Withholding of Tax on Corporate Profit

Profit tax is withheld by a tax agent from the total amount of income paid to a non-resident at the following rates:

Type of income Profit tax (%)
Insurance compensation, reinsurance and freight income 5
Dividends, interest, leasing income, royalty, other income received from Armenian sources, etc. 10

Withholding of Tax On Personal Income

The tax on monthly income less than 80.000 AMD as well as on royalties, leasing and interest income, paid to an individual is withheld by a tax agent on each payment at the rate of 10%. Taxes on monthly income in excess of 80,000 AMD is withheld at 20%.

Specific Regulations for the Taxation of Foreign Citizens and Persons without Citizenship

Income of foreign citizens and persons without citizenship should be withheld by the tax agent at the source at the following rates:

Type of income Income Tax rate (%)
Insurance compensation, freight income 5
Royalty, leasing, interest income, etc. 10

Dividends and Royalties

The tax rate on non-residentís dividends and royalties is 10%. Tax on dividends is paid only by non-resident enterprises (i.e. non-resident physical persons are exempt). These rates may be reduced by a tax treaty.
The maximum rates for this tax, taking into account tax treaties are:

Payee resident in Dividends (%) Interest (%) Royalties (%)
Bulgaria 10 (a) 10 10
China 10 (b) 10 10
Ukraine 15 (b) 10 -
Iran 15 (d) 10 5
Romania 10 (b) 10 10
Russia 10 (a) - -
Turkmenistan 15 (b) 10 10
Lebanon 10 (b) 8 5
France 15 (c) 10 10 (e)
Lithuania 15 (b) 10 10
Latvia 10 10 10
Greece 10 (b) 10 5
Georgia 10 5

N.B.

(a) rate of 5% where the payee holds more than USD 40,00 in capital of the company, paying the dividends;

(b) rate of 5% where the payee holds more than 25% of capital of the company, paying the dividends;

(c) rate of 10% where the payee holds more than 10% of capital of the company, paying the dividends;

(d) rate of 10% where the payee holds more than 25% of capital of the company, paying the dividends;

(e) rate of 5% applied for author's rights.
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