Employers in Armenia are required to withhold
personal income tax (PIT) and
social security contributions from the income paid to their employees or contractors.
- PIT: a flat rate of 21% for both Armenian citizens and foreigners (regardless of the amount of compensation).
- Over the next few years, PIT will gradually be reduced to 20%, specifically:
- 21% from January 1, 2022 (already in effect);
- 20% from January 1, 2023.
In addition to PIT, employers must withhold social security contributions:
- 5% (for income up to 500,000 AMD, approx. USD 1,030);
- 10% (for income above 500,000 AMD).
The maximum social security contribution is capped at
1,020,000 AMD per month (15 × minimum monthly wage of 68,000 AMD). Only 50% of this amount is paid by the employee, while the remaining 50% is covered by the state (since July 2018).
- Non-Resident Tax RatesDividends – 5%
- Profit – 10%
- Royalties – 10%
- Rental income from real estate – 10% (+ additional 10% for income exceeding 60 million AMD)
- Capital gains from real estate sales – 10% to 20% (depending on property type and buyer status; sale of non-business property by individuals is not taxed)
- COVID-19 Related Changes (as of April 2020)Late payment penalties reduced from 0.075% to 0.04% per day of delay.
- Threshold for non-compliance with tax obligations increased from 500,000 AMD to 1,500,000 AMD.