Armenia Tax Changes in 2026: What Changed and What It Means for Your Business

Armenia tax changes 2026 include the turnover tax increases introduced in 2025, which remain in force this year: trade is taxed at 10%, production at 7%, and catering at 12%. Mandatory health insurance began on 1 January 2026. Four laws amended the Tax Code between March and May 2026, covering audits, criminal thresholds, e-commerce VAT and foreign currency accounting, while a separate automatic debt collection procedure has applied since 1 July. The general system remains 18% profit tax and 20% VAT.

Key takeaways

• The turnover tax ceiling is AMD 115 million of prior-year turnover; micro-entrepreneurship sits at AMD 24 million. Neither changed for 2026.
• Four amendment laws were enacted between 30 March and 27 May 2026. Three take effect on 8 June and 1 July; one not until 1 January 2027. A fifth measure, automatic debt collection, has applied since 1 July 2026.
• The criminal threshold for large-scale tax evasion tripled, from AMD 10 million to AMD 30 million per tax year.
• Since 1 July 2026, an unpaid balance above AMD 200,000 triggers an automatic State Revenue Committee reminder with a seven-day objection window. Smaller balances reach the same process two months later.
• The simplified regime is not automatically cheaper, and the comparison is not rate against rate. Since 2025 turnover tax is reduced by a percentage of documented expenses, subject to a floor, so your effective rate sits between that floor and the headline rate (1% to 10% for trade).

What changed in Armenian tax law for 2026?

Four amendment laws to the Armenian Tax Code were enacted between 30 March and 27 May 2026 – HO-83-N on 30 March, HO-200-N and HO-234-N on 6 May, and HO-207-N on 27 May. A fifth measure, the automatic collection procedure introduced by law HO-104-N, has applied since 1 July 2026. The 2025 turnover tax rate increases carried forward unchanged, and mandatory health insurance began on 1 January 2026.

Four of these affect ordinary operating companies rather than specialists.

• Unpaid balances now trigger automatic collection. Article 398(5), introduced by law HO-104-N, applies from 1 July 2026. Where the balance on the taxpayer’s personal account card exceeds AMD 200,000, the State Revenue Committee issues a reminder on the day the liability arises. Where the balance is AMD 200,000 or less, the reminder is issued once two months have passed. Either way the taxpayer then has seven calendar days to file written objections before the SRC can order collection and restrict bank accounts. A small balance is not outside the process; it is two months behind it. 
• Tax audits became more frequent. Law HO-207-N permits the SRC to conduct up to three thematic reviews per year in certain cases. A second or third requires specific authorisation from the head of the tax authority. The tax authority may also now rely on information it obtains itself, not only on what the taxpayer submits.
• Foreign currency accounting was rewritten. Article 16 previously required taxpayers to translate items using the exchange rate on the date supporting documents were issued. Under the revised rule, the applicable rate is generally the Central Bank of Armenia rate published on the working day preceding recognition of the item. Currency exchange transactions use the rate on the transaction date. If you invoice in USD or EUR, your bookkeeping treatment changed on 1 July 2026.
• Goods returns became easier to correct. Amendments to Article 42 allow post-sale adjustment whenever goods are returned, in whole or in part, rather than only for defective goods. The original settlement document stays valid and the taxpayer issues an adjustment document. This interacts with the tax classification of expenses, where documentation quality determines deductibility.

Two changes are narrower. Law HO-200-N introduced a margin-based VAT base for gold and jewellery, with input VAT generally non-deductible. Law HO-83-N will make electronic marketplace operators responsible for Armenian VAT on certain cross-border business-to-consumer goods sales from 1 January 2027. Law HO-234-N also created a new VAT exemption for tourism services supplied by tour operators and travel agents to foreign tourists, where the trips take place inside Armenia.

Source: EY Armenia Tax Alert, 17 July 2026

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How does Armenia’s turnover tax work in 2026?

Turnover tax is a simplified Armenian tax regime that replaces value added tax and profit tax with a single tax on gross revenue. For resident commercial organisations, it replaces both. For individual entrepreneurs, it replaces VAT.

Eligibility depends on prior-year turnover and activity type. A resident commercial organisation or individual entrepreneur whose total turnover from all activities in the previous tax year did not exceed AMD 115 million may qualify. Branches of foreign companies cannot use the regime.

The election must be filed by 20 February each year, or within 20 days of registration for a new entity, under Article 254(1). Miss both windows and the general taxation system applies automatically for the whole year. Turnover tax payers file quarterly and pay within 20 days following the end of the reporting period.

For a fuller treatment of the regime itself, see our guide to the turnover tax in Armenia and who should pay it.

Turnover tax rates by activity type 

Rates increased under amendments effective 1 January 2025 and are unchanged for 2026. The trade rate doubled, from 5% to 10%.

The last row needs explaining. The 20% rate applies only to taxpayers who have filed the tax authority’s declaration to be taxed as a public catering operator, and then only on income falling outside the “public catering organisation” heading of the activity classifier, other asset disposals and other activity. It is a specific-case rate, not a general one, and it is why some published rate tables look wrong.

Every rate above is taken from the consolidated text of Article 258(1) as rewritten by law HO-285-N of 12 June 2024 and further amended by law HO-500-N of 4 December 2024, both in force from 1 January 2025. Tables still showing 5% for trade, or 5% for high-tech activity, predate those two laws.

The expense deduction, and why it changes the answer 

Since 1 January 2025, turnover tax payable is reduced by a percentage of documented expenses, subject to a floor expressed as a percentage of turnover. This is the most consequential feature of the regime, and the one most often left out of rate comparisons.

Deductible expenses are defined in Article 258(6): documented costs directly related to producing the goods, performing the work or supplying the service, the initial cost of goods held for resale, and selling expenses. Depreciation on production fixed assets and intangibles is excluded, as is the cost of assets received free of charge. Unused deductions carry forward to later reporting periods under Article 258(7).

The deduction reaches four rows of the rate table and no others: trade, production, public catering, and other activities. Rental income, interest, royalties and asset disposals get no deduction at all, so their effective rate is a flat 10%. So is the 1% high-tech rate; there is nothing to deduct from it, which is part of why it is worth so much.

The consequence is that your effective turnover tax rate is not the headline rate. It sits between the floor and the headline rate, depending on how much of your cost base is documented. A trading company with a heavy purchased-goods cost base pays close to 1% of revenue rather than 10%. A service business with few documented costs pays close to 10%.

Two things follow. Documentation quality is now worth money directly, not only in an audit. And any comparison between the two regimes that runs off the headline rate is arithmetic about a number nobody actually pays.

We covered the underlying amendments when they were passed, in changes to the Tax Code related to turnover tax.

Who Cannot Elect Turnover Tax Under Armenia Tax Changes 2026?

Activity classification excludes some businesses regardless of turnover:

• Banks, credit organisations, insurance companies, insurance agents and brokers
• Investment companies, specialised securities market participants, investment funds, fund managers
• Pawnshops, foreign exchange trading operators, payment organisations
• Casinos, gambling establishments, totalizator and internet totalizator operators, lottery organisers
• Notaries, audit organisations, and advocates providing advocacy services
• Construction, from 1 July 2025: activities in section F of the economic activity classifier group 41 (construction of buildings), group 42 (civil engineering) and group 43 (specialised construction activities)
• Entities with 20% or more common ownership with another entity, and entities declared related by the head of the tax authority where combined turnover exceeds AMD 115 million

Two things about that list are worth being precise about, because most published guides get them wrong.

It excludes advocates, not lawyers generally. Article 254(3) names notaries, audit organisations and providers of advocacy services. Legal work performed outside the advocacy profession is not named.

It does not exclude consulting or accounting. General consulting, accounting, marketing and engineering are excluded from micro-entrepreneurship status under Article 267(5), and they are not excluded from the turnover tax regime under Article 254(3). The two lists are genuinely different, and conflating them is the single most common error in English-language guides to Armenian tax, including, in an earlier draft, this one.

Construction is the exclusion that actually changed. Point 3.1 was added to Article 254(3) with effect from 1 July 2025 and takes section F out of the regime. If you build, that is the provision to read, and it is recent enough that most guides have not caught up.

Confirm against your registered activity code rather than your job title. The classifier code is what the tax authority reads.

Is micro-entrepreneurship status still worth it?

Micro-entrepreneurship status is an Armenian regime under which qualifying small businesses are exempt from most state taxes arising from their activity. Eligibility requires prior-year turnover from all activities not exceeding AMD 24 million.

For businesses that qualify, it is the cheapest regime available. Income tax on employee salaries still applies, as do the annual stamp duty and, from the applicable year, the health insurance contribution.

The difficulty is qualifying. The exclusion list, in Article 267(5), catches most service businesses that foreign founders set up:

• The full financial-sector list above, plus saunas, bathhouses and steam baths, and audit firms
• Consulting and personal services – Article 267(5)(2) is long and specific: consulting, legal, accounting, engineering, advertising, design, marketing, translation, expert and forensic services; medical care, dental technician, hairdressing and body care services; vehicle servicing and repair; brokerage, including in property sale and letting; software development; information processing and transmission; research, experimental design and technological work; construction work and architectural design; property valuation and measurement, and any work or service similar to those named
• Trade by commercial entities and individual entrepreneurs
• Public catering within the administrative boundaries of Yerevan, except hotel services directly related to tourism

There is a second trade-off that rarely gets mentioned: business customers cannot deduct payments made to a micro-enterprise as an expense. If you sell to Armenian companies rather than to consumers or foreign clients, micro status makes you a more expensive supplier than a competitor on another regime, which can cost you more than the tax saves.

If you are a freelance developer, designer, marketer or consultant registered as an individual entrepreneur in Yerevan, micro status is probably unavailable to you. Our guide to taxes for freelancers in Armenia works through the alternatives.

When do you have to move to the General Taxation System? 

The General Taxation System is Armenia’s default tax regime, under which a company pays 18% profit tax on net taxable profit and 20% VAT on domestic supplies. It applies automatically to any business that does not or cannot elect a simplified regime.

You move to it in four circumstances: prior-year turnover exceeded AMD 115 million; your activity classification excludes you; you failed to elect by 20 February; or you crossed the threshold during the year.

The standard profit tax rate is 18% for resident companies. Non-resident companies without a permanent establishment are taxed at 20%. VAT-registered businesses file a unified VAT and excise return monthly, by the 20th of the following month.

VAT registration becomes mandatory once annual turnover exceeds AMD 115 million under Article 59(2) – the same figure as the turnover tax ceiling, which is why the two are usually discussed as one threshold. Some guides still in circulation state AMD 120 million. The figure in the Tax Code is AMD 115 million.

What happens if you exceed the threshold mid-year?

Crossing AMD 115 million during the tax year ends turnover taxpayer status from the moment the threshold is exceeded, and it does not resume before the end of that calendar year. VAT is calculated on the excess, and the corresponding filing falls due within 20 days.

This is the transition that gets discovered late, because nothing forces the issue at the time. The business keeps invoicing as before, at the turnover tax rate, and the problem surfaces months later when someone reconstructs the year. By then, the VAT was due, the filing was late, and the daily fine has been accruing at 0.075% on the unpaid amount.

Three consequences arrive together:

1. Registration. VAT registration becomes mandatory and cannot be opted out of.
2. Invoicing. Supplies from the moment of the breach onward fall under the general system, so pricing and documentation change mid-year.
3. Filing frequency. You move from quarterly turnover tax returns to monthly VAT returns due by the 20th.

There is one piece of relief in Article 264(4). Any expense deduction you had accumulated but not used against turnover tax does not vanish on transition. It is multiplied and deducted from gross income in the reporting period that includes the switch: tenfold for trade, twentyfold for production, tenfold for public catering, fifteenfold for other activities. Worth calculating before you assume the transition is pure loss.

There is also a fourth consequence that almost no guide mentions: you cannot return to the turnover tax regime the following year. Crossing the threshold in one year means the general system applies for all of the next year as well. The earliest you can re-elect is the year after that, and only if the intervening year stayed below AMD 115 million. A mid-year breach is a two-year event, not a one-year one.

If you trade anywhere near AMD 115 million, cumulative turnover-to-date is the number to watch monthly rather than annually. It is the one figure where finding out in March that you crossed in July costs real money, which is the argument for monthly financial reviews rather than an annual look.

Which regime actually costs you less? 

Turnover tax is charged on gross revenue. Profit tax is charged on net profit. That difference is real, but the comparison usually run from it is wrong, because it uses the headline turnover rate rather than the rate anyone actually pays.

Start with the effective rate, after the expense deduction described above:

Only then does the break-even calculation mean anything. Turnover tax costs effective rate × revenue. Profit tax costs 18% × margin × revenue. Setting those equal:

Break-even profit margin = effective turnover tax rate ÷ 18%

Below your break-even margin, the general system costs less. Above it, turnover tax costs less. Note how wide the trade band is: the same 10% headline rate produces a break-even anywhere from 5.6% to 55.6%, depending on documented purchases. Anyone quoting a single break-even figure for trade has not looked at the deduction.

Two worked examples, each at AMD 100 million of annual revenue. A consultancy is not shown, because since 2025 consulting activities cannot elect the regime at all.

Trading company, 12% margin, AMD 88 million of total costs. The answer turns on how much of that cost base is documented purchases of goods for resale:

Three plausible versions of the same business, and the answer changes twice across them. For a trading company it is the deduction, not the margin, doing most of the work, and nobody can answer the question from headline rates.

Certified IT company, 40% margin, on the 1% high-tech rate. Turnover tax of AMD 1,000,000 against profit tax of AMD 7,200,000. The 1% rate wins comfortably and has no deduction mechanism to complicate it, which is why it is the one case where the simple comparison holds.

What this comparison leaves out. It compares turnover tax against profit tax only. It excludes the VAT administration burden and its cashflow effect; non-deductible expense categories that push taxable profit above accounting profit; input VAT recovery, which favours the general system for capital-intensive businesses; and export zero-rating, which favours the general system for exporters. It also assumes your purchases are documented to the standard the tax authority actually applies, which is the assumption that fails most often.

It also assumes you have a choice. Eligibility depends on your activity classification, and no arithmetic can tell you whether you qualify.

Not sure which regime you should be on? Run the numbers with our tax calculator, or send us last year’s figures and we’ll tell you.

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What tax incentives exist for IT and high-tech companies? 

Certified high-tech companies can elect a 1% turnover tax rate on government-listed high-tech activities. It is the largest single tax advantage in the Armenian system. At a 1% rate, it beats the general system for any business with a profit margin above 5.6%.

Article 258(1) sets the rate by reference to activities included in the government-established list of high-tech sector activity types. The election is filed by 20 February like any other regime election, and the AMD 115 million turnover ceiling still applies. The rate was introduced by law HO-500-N of 4 December 2024 and, by the express terms of that law, operates until 31 December 2031, a date worth putting in a long-range plan rather than discovering in 2032.

Certification requirements sit outside the Tax Code, in the government decree defining the qualifying list, and include a minimum share of income from qualifying activity. Treat that share as a live condition rather than a one-off check: a software company that adds a non-qualifying revenue line (consulting, reselling, training) can fall below it and lose the rate for the year. We set out the underlying legislation in tax benefits for the high-tech sector of Armenia.

The trade-off is that ceiling. A certified IT company crossing AMD 115 million loses the 1% rate and moves to the general system, where its bill goes from 1% of revenue to 18% of profit. For a 40%-margin business, that is a jump from 1% to 7.2% of revenue, a sevenfold increase triggered by growth alone. Companies approaching the threshold need to model the year after the year in front of them.

Companies under the general system may instead claim salary-based deductions and profit tax refunds under state support programmes. The two routes are alternatives rather than additions, so a certified company has a genuine decision rather than a default.

What new obligations start in 2026?

Mandatory health insurance began on 1 January 2026. The annual premium is AMD 129,600 per covered person, or AMD 10,800 per month.

For employees in scope during 2026, stamp duty and social credit offsets reduce the net monthly deduction:

• Gross AMD 200,001–500,000: around AMD 300 per month
• Gross AMD 500,001–1,000,000: around AMD 3,300 per month
• Gross AMD 1,000,001 and above: the full AMD 10,800 per month

Individual entrepreneurs are the group to watch. They pay the full AMD 129,600 with no subsidy, whether or not they already hold private health insurance. The annual stamp duty was unified at AMD 12,000 for annual income up to AMD 12 million alongside this change.

Later phases are scheduled: employees below AMD 200,000, civil-law contract workers and recipients of passive income from 1 January 2027; agricultural workers and their families from 2028. The split of the 2027 cohort’s premium between state, employee and employer was still under government discussion in August 2026, so treat 2027 payroll budgets as provisional. Our guide to payroll outsourcing in Armenia sets out the full contribution picture.

Property tax is being phased onto full cadastral value. For the 2025 reporting year the base was 75% of the product of cadastral value and the Article 229 rate, for property other than agricultural land, and the phase-in continues into 2026. Individuals pay by 1 December. If you hold property through a company, check the current year’s percentage and your payment schedule against Article 236 before budgeting (the phase-in percentage moves annually and published summaries lag it).

Your 2026 Armenian tax calendar 

Filings must be submitted in Armenian in the formats set by the State Revenue Committee. There is no extension available for the profit tax filing deadline. Individuals should also check the annual income declaration requirements, which now reach far more people than they once did.

Not sure which regime you should be on? Send us last year’s numbers and we’ll tell you.

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Frequently asked questions

What is the turnover tax rate in Armenia in 2026?

The rate depends on activity. Trade is taxed at 10%, production at 7%, public catering at 12%, rental income, interest and royalties at 10%, and government-listed high-tech activities at 1%. Trade in listed secondary raw materials is taxed at 5% and newspaper sales by editorial offices at 1.5%. The trade rate doubled from 5% to 10% under amendments effective 1 January 2025.

Can a foreign-owned company use the turnover tax regime?

Yes. Foreign ownership is not a constraint. The constraints are prior-year turnover, which must not exceed AMD 115 million, and activity classification, which excludes financial services, gambling, notaries, audit firms and legal service providers. Branches of foreign companies are excluded, but a wholly foreign-owned Armenian company meeting both tests may elect the regime.

What’s the deadline to change tax regime in Armenia?

The declaration must be filed between 1 and 20 February each year, under Article 254(1). A newly registered entity has 20 days from registration. Miss both windows and the General Taxation System applies automatically for the whole year, at 18% profit tax and 20% VAT, until the following February. The deadline is firm.

Is the simplified regime always cheaper?

No, and the usual way of answering this is wrong. Turnover tax is charged on gross revenue, but since 2025 it is reduced by a percentage of documented expenses subject to a floor: 9.5% of purchased goods for trade, with the tax not falling below 1% of turnover. Your effective rate therefore sits between the floor and the headline rate, and the break-even margin moves with it. For a trading company break-even falls anywhere between 5.6% and 55.6% depending on documentation. Run the comparison on your own purchase records; the headline rate will not tell you.

Do accounting and consulting firms qualify for turnover tax?

Yes, subject to the turnover test. Consulting and accounting are excluded from micro-entrepreneurship status under Article 267(5), but they are not among the activities excluded from the turnover tax regime under Article 254(3), which names financial services, gambling, notaries, audit organisations, advocates and, since 1 July 2025, construction. The two lists are different and are constantly conflated. An audit organisation is excluded; an accounting firm that does not perform audit is not. Check your registered activity code rather than reasoning from the job title.

What happens if I cross the VAT threshold mid-year?

Turnover taxpayer status ends from the moment the threshold is exceeded, and does not resume before the end of that calendar year. VAT is calculated on the excess and the filing falls due within 20 days. VAT registration becomes mandatory and filing moves from quarterly to monthly. You also cannot return to the regime the following year: the earliest possible re-election is the year after that, and only if the intervening year stayed below AMD 115 million. Any unused expense deduction is carried into the general system at a multiple under Article 264(4), which softens the transition but does not reverse it.

Are there penalties for choosing the wrong regime?

Electing a regime you were not eligible for is not itself a penalty offence. The exposure is reclassification: the tax authority assesses the liability that would have applied under the correct regime, plus the 0.075% daily fine on unpaid amounts. Since 8 June 2026 the SRC may conduct up to three thematic reviews per year in certain cases, raising the chance of reassessment.

Does mandatory health insurance apply to me?

In 2026, yes if you are an employee earning above AMD 200,000 gross per month, or an individual entrepreneur or notary whose 2025 income exceeded AMD 2,400,000. The annual premium is AMD 129,600. Individual entrepreneurs pay it in full by 20 April with no state subsidy. Employees below AMD 200,000 join from 1 January 2027.