Tax news for Armenia 2025
February 2025The most important tax news for Armenia in 2025 revolves around significant changes aimed at supporting the high-tech sector and a broader reform of the turnover tax system.
Here's a breakdown:
1. Strong Support for the High-Tech Sector:
Tax Incentives: A new law introduces substantial state support for individuals and organizations operating in high-tech sectors, including the IT industry.
This includes:
Reimbursement of income tax paid on salaries of professional migrant workers.
Reimbursement of income tax paid on salaries for newly hired employees.
Reimbursement of income tax calculated on salaries for training and retraining professional workers.
Reduced Turnover Tax Rate: The turnover tax rate for businesses in the high-tech sector will decrease from 5% to 1%, making Armenia one of the most tax-friendly environments for these companies in the region.
This applies to companies with an annual turnover of less than AMD 115 million (approximately USD 298,000).
Reduced Personal Income Tax Rate: The personal income tax rate for salaries paid to individuals engaged in scientific research and experimental development within the high-tech sector will be halved from 20% to 10%.
2. Turnover Tax System Reform:
Increased Turnover Tax Rate: The turnover tax rate for businesses outside the high-tech sector will double from 5% to 10% starting in January 2025.
Transition to General Taxation System: Many businesses currently under the turnover tax system will be required to transition to the general taxation system, which includes Value Added Tax (VAT) at 20% and profit tax at 18%, starting in July 2025. This primarily affects individual entrepreneurs providing professional services and operating as SMEs.
Key Considerations:
Eligibility: Businesses must meet specific criteria to be recognized as high-tech sector entities and benefit from the incentives.
Impact on SMEs: The turnover tax system reform has raised concerns among small and medium-sized enterprises (SMEs) due to the increased tax burden and complexity of the general taxation system.
Overall:
Armenia's tax landscape in 2025 will see significant changes, with a strong focus on promoting the high-tech sector through various incentives and a broader reform of the turnover tax system that will impact many businesses. It's crucial for businesses to stay informed about these changes and seek professional advice to ensure compliance and optimize their tax strategies.
Armenia and Irelad New Double Tax Treaty
July 2011Armenia and Ireland signed on July 14 a double tax treaty, DTA, which is expected to boost the bilateral business relations between the two countries.
The treaty provides , inter- alia , reduced tax withholding rates for payments of dividend, interest and royalties between the countries.
The DTA will enter into effect after being ratified by both countries.
Armenia signed an additional DTA with the UK on July 13.
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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