IEs and LLCs in Armenia have three main tax regimes: micro-business, turnover tax and the general regime with VAT and profit tax. Your choice determines how much tax you pay and which reports you file. Here is a short overview of each.
The three regimes at a glance
| Regime | Who can use it | What you pay | Reporting |
|---|---|---|---|
| Micro-business | Previous-year turnover of no more than AMD 24 million; activity not on the excluded list | No turnover tax, profit tax or VAT. For each employee: income tax of AMD 5,000 a month | Annual report by 1 February; employee reports monthly by the 20th |
| Turnover tax | Turnover of no more than AMD 115 million; activity not on the excluded list | A percentage of revenue; the rate depends on the activity (see below) | Quarterly, by the 20th of the month after the quarter |
| General regime | Everyone, no threshold. Mandatory above AMD 115 million turnover | VAT 20%. An LLC pays 18% profit tax; an IE pays income tax on business income | VAT monthly by the 20th; annual profit or income tax return |
Turnover tax rates since 1 January 2025
- Trade: 10%.
- Manufacturing: 7%.
- Catering: 12%.
- Rent, interest, royalties: 10%.
- Other activities: 10%.
Since 2025, the tax can be reduced by part of your documented expenses, but not below the minimum rate for your activity. That is why documenting expenses matters under turnover tax.
Who cannot use the simplified regimes
The exclusion list is long. It includes, among others, consulting, legal and accounting services, as well as banks, insurers, pawnshops and gambling. Amendments signed on 4 April 2025 widened the list: since 1 July 2025, a number of professional services, including legal, accounting and consulting, can use neither micro-business nor turnover tax. Check your activity against the Tax Code before choosing a regime.
How to choose: simple rules
- Small turnover (up to AMD 24 million) and an allowed activity: consider micro-business.
- Turnover up to AMD 115 million, high margin and few expenses: turnover tax is often cheaper.
- Many documented expenses, VAT-registered clients or turnover above AMD 115 million: the general regime.
- Activity on the excluded list: general regime only.
It is better not to guess but to calculate the taxes on your real numbers: revenue, expenses and employees.
When you can change regime
- New business: within 20 days of registration.
- Every year: from 1 January to 20 February, online.
- If your turnover exceeds the regime’s threshold, switching is mandatory.
How a foreigner can open an IE in Armenia
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