Armenia's taxes at a glance
Structure used: Individual entrepreneur on the turnover tax system selling services abroad: 10% of turnover less 6% of documented direct costs (minimum 4.5%), plus AMD 5,000 a month profit tax and AMD 5,000 a month social contribution. Listed high-tech activities pay 1% instead. Bands are the effective tax on profit for a remote worker using this structure, with clients abroad and costs of 15% of revenue.
Armenia tax residency: 183 days or your center of life
Under Article 25 of the Tax Code, you are resident if you are in Armenia for 183 days or more, and the days you arrive and leave both count as full days whatever the hours. You are also resident, with no day count, if your center of vital interests is in Armenia: your house or apartment, your family or your main place of work. Resident on any day of the tax year means resident for the whole year.
Days are the harder route for most foreigners. The Ministry of Foreign Affairs caps visa-free stays at 180 days a year, 3 days short of the test, so being resident by days takes a temporary residence permit, and for freelancers the usual basis is registration as an individual entrepreneur. From November 1, 2026, that permit needs AMD 1,000,000 (about $2,750) in your accounts or the same amount of turnover in the 60 days before you apply, under amendments to the Law on Foreigners.
Staying under 183 days in Armenia: when it keeps you non-resident and when it does not
Holds
Your home, family and business stay in Lisbon, and you spend 120 days a year in Yerevan without working while you are there. You are not resident, and Armenia has no claim on your foreign income.
Fails
You spend 170 days a year in Yerevan, rent an apartment on a yearly lease, your partner lives there and your business is registered there. Staying under 183 days does not help: your center of vital interests is in Armenia, so you are resident for the whole year and your foreign dividends are taxed at 5%.
Armenia's tax rates for individuals and freelancers in 2026
How Armenia taxes an individual's income, 2026
| Income | Rate | Tax Code rule |
|---|---|---|
| Salary and other income of an individual, no special system | 20% | Article 150(1) |
| Individual entrepreneur on the turnover tax, services and other activities | 10% of sales, less 6% of documented direct costs, minimum 4.5% | Article 258(1) and (5) |
| Individual entrepreneur on the turnover tax, activity on the Government's high-tech list | 1% of sales until December 31, 2031 | Article 258(1) |
| Fixed profit tax on top of the turnover tax | AMD 5,000 (about $14) a month | Article 125(3) |
| Individual entrepreneur on the general system | 18% profit tax, plus 20% VAT as a VAT payer | Articles 125(1) and 63(1) |
| Dividends | 5% | Article 150(8) |
| Bank deposit interest, royalties and rent | 10% | Article 150(5.1), (6) and (7) |
| Micro-entrepreneurship, sales up to AMD 24,000,000 (about $66,100), eligible activities only | 0% | Article 267 |
The turnover tax is the system most remote freelancers use, and it is open to an individual entrepreneur whose sales in the previous year stayed at or below AMD 115,000,000 (about $317,000) under Article 254. Banks, insurers, notaries, audit firms and legal service providers cannot use it.
On $100,000 of fees with documented direct costs of 15%, the turnover tax comes to about $9,430 a year, 11.09% of profit, once the fixed AMD 5,000 (about $14) monthly profit tax and the AMD 5,000 (about $14) monthly pension contribution are added. The pension contribution applies to entrepreneurs born in 1974 or later, and a foreigner pays it on the same terms once they hold Armenian residence status, under the Law on Funded Pensions. In an activity on the high-tech list, the same freelancer pays about $1,330.
Micro-entrepreneurship, with no turnover tax, profit tax or VAT on sales up to AMD 24,000,000 (about $66,100), looks better on paper, but Article 267 shuts out almost every remote service: consulting, legal, accounting, engineering, advertising, design, marketing, translation, information processing, and research and development.
David's note
If your work is IT, I would get the registered activity right on day one rather than fix it later. Whether you pay 1% of sales or about 11% of profit is decided by whether that activity is on the Government's high-tech list, not by what your clients call your work.
Foreign income for Armenian residents
Armenia taxes residents on gross income from sources in and outside the country from the first year, with no newcomer exemption, under Article 141. Foreign dividends are taxed at 5%, bank deposit interest and royalties at 10%, and most other income at the flat 20%.
An individual entrepreneur's business income is the exception: it sits outside income tax and is taxed through the turnover tax or the general system instead, on all sales, including services sold to clients abroad. A non-resident owes tax only on Armenian-source income, but work actually performed in Armenia is Armenian-source, so a visitor working for foreign clients from a Yerevan cafe is not outside the system.
What a freelancer in Armenia files
Armenia filing checklist for an individual entrepreneur
- Register as an individual entrepreneur and, within 20 days, submit the statement opting into the turnover tax; miss it and you are a VAT payer until December 31.
- For each later year, submit the turnover tax statement by February 20.
- File the turnover tax report and pay the tax by the 20th of the month after each quarter, under Articles 259 to 262.
- Keep documents for every direct cost, because only documented costs reduce the 10% rate.
- Track sales against AMD 115,000,000 (about $317,000) for the year: above it, the turnover tax is closed to you the following year.
- File the annual income tax return by May 1 for income no tax agent withheld on, such as foreign dividends and interest.
Ways to move to Armenia
| Route | Minimum income or investment | Permit length | Makes you tax resident | Status |
|---|---|---|---|---|
| Visa-free stay Source: mfa.am, checked September 29, 2026Visa-free stay | None | 6 months | With enough daysNo tax effect by itself; 180 visa-free days fall 3 days short of the 183-day test, so residence by days needs a permit. | Open |
| Temporary residence permit for entrepreneurs Source: ey.com, checked September 28, 2026Self-employed route | AMD 1,000,000 (about $2,750) Source: ey.com, checked September 28, 2026. From November 1, 2026: AMD 1,000,000 (about $2,750) in accounts, or AMD 1,000,000 of turnover in the 60 days before applying; AMD 2,000,000 charter capital for company shareholders (amendments to the Law on Foreigners adopted January 20, 2026, EY Armenia) | 12 months, renewable | With enough daysNo tax effect by itself; lets the holder stay past 180 days and meet the 183-day test. | Changed |
Special tax regimes in Armenia
Turnover tax for individual entrepreneurs
An individual entrepreneur whose sales in the previous year stayed at or below AMD 115,000,000 (about $317,000) can opt for the turnover tax instead of VAT. Services pay 10% of turnover, reduced by 6% of documented direct costs down to a floor of 4.5%, plus a fixed profit tax of AMD 5,000 a month. Activities on the Government's high-tech list pay 1% until December 31, 2031.
Open, with terms changed recently. Source: arlis.am, checked September 29, 2026. Rates raised from January 1, 2025 by Law HO-285-N of June 12, 2024: services moved from 5% of turnover to 10% less 6% of documented costs Deadline: December 31, 2031.
Micro-entrepreneurship
Businesses with prior-year sales up to AMD 24,000,000 (about $66,100) are exempt from the taxes that micro-entrepreneurship replaces, but the regime excludes almost every remote service: consulting, legal, accounting, engineering, advertising, design, marketing, translation, information processing, research and development.
Open to new applicants. Source: arlis.am, checked September 29, 2026
Running your own company while living in Armenia
Armenia decides where a company is resident by where it is registered, under Articles 22 and 23 of the Tax Code, so a foreign company is not treated as an Armenian organization because you run it from Yerevan. What reaches you personally is taxed: dividends at 5% as a resident, and anything paid to you as salary or fees at the flat 20%.
That leaves most freelancers choosing between staying an individual entrepreneur and forming an Armenian company, and the 5% dividend tax usually decides it.
Individual entrepreneur or Armenian company for a freelancer living in Armenia
| What matters | Individual entrepreneur, turnover tax | Individual entrepreneur, general system | Armenian company |
|---|---|---|---|
| Tax on the business | 10% of sales less 6% of documented costs (minimum 4.5%), or 1% on the high-tech list, plus AMD 5,000 a month | 18% profit tax | Turnover tax if it qualifies, otherwise 18% profit tax |
| VAT | None while on the turnover tax | 20% as a VAT payer | None on the turnover tax, 20% as a VAT payer |
| Tax when money reaches you | None, the income is already yours | None, the income is already yours | 5% on dividends |
| Sales ceiling | AMD 115,000,000 in the previous year | None | AMD 115,000,000 for the turnover tax |
For a one-person service business, the individual entrepreneur on the turnover tax is usually the simpler and cheaper route: the same rates apply, nothing extra is due when you take the money out, and the filing is a quarterly report instead of company accounts.
US citizens living in Armenia
Armenia is on the IRS list of income tax treaty countries, but the US taxes its citizens on worldwide income wherever they live, so an American in Yerevan still files a US return and usually relies on the foreign earned income exclusion, up to $132,900 for 2026.
Armenia is not among the 31 countries with a US totalization agreement, so a self-employed American owes 15.3% on 92.35% of net profit, about $14,130 on $100,000, and the IRS states that the exclusion does not reduce it. That comes on top of the Armenian turnover tax.
The costliest Armenia mistake: missing the 20-day turnover tax deadline
No statement within 20 days means the general system until December 31
A new individual entrepreneur who does not submit the turnover tax statement within 20 days of registration is a VAT payer from registration to the end of the year under Article 59 of the Tax Code, on the general system with 18% profit tax instead of the turnover tax. The next chance to switch is the statement due by February 20 of the following year.
File the statement the day you register, and put February 20 in your calendar for every year after. If your sales are heading past AMD 115,000,000 (about $317,000), plan the following year on the general system, because the turnover tax will be closed to you.
Who Armenia suits, and who it does not
Good fit
- IT freelancers whose activity is on the Government's high-tech list: 1% of turnover as an individual entrepreneur until 2031.
- Freelancers with sales up to AMD 115,000,000 (about $317,000) a year who accept about 11% of profit as the cost of a simple turnover tax.
- Visa-exempt nationals who want 180 days a year without a permit.
Poor fit
- Investors with foreign dividends, interest and gains: residents are taxed on worldwide income.
- Consultants, designers, marketers and other service providers hoping for the micro-business exemption, which excludes them.
- People who want tax residency without a permit: visa-free stays stop at 180 days a year.
Recent tax and visa changes in Armenia
Law on Foreigners amendments take effect: AMD 1,000,000 in accounts or 60-day turnover for entrepreneur-based temporary residence, AMD 2,000,000 charter capital for company shareholders (EY Armenia). ey.com
Turnover tax on services and other activities raised from 5% of turnover to 10%, reduced by 6% of documented direct costs to a 4.5% floor (Law HO-285-N of June 12, 2024). primeminister.am
1% turnover tax for activities on the Government's high-tech list, effective until December 31, 2031 (Laws HO-285-N and HO-500-N of 2024). arlis.am
