Knowledge base / Taxes
Micro-business regime in Armenia: who qualifies and what you still pay
How the regime works
Armenia has three main tax systems: the general regime (20% VAT and 18% profit tax), turnover tax, and micro-business. A micro-business is exempt from taxes on its own activity, except for cases the Tax Code spells out. LLCs, sole proprietors and, in some cases, individuals without IE status can use it.
The test is simple: total turnover from all activities in the previous year must not exceed AMD 24 million. That means everything you receive, not your profit. Foreign-currency income is converted into dram, so exchange-rate swings can push you closer to the limit.
The government has promised to at least double the threshold, with 2027 as the target. As of autumn 2026, no Tax Code amendment has been passed, so plan around AMD 24 million.
Who can't use it
The list of exclusions matters more than the threshold. Among others, the regime is not available to:
- banks, insurers, credit organizations, investment funds, pawnshops, currency exchanges and payment organizations;
- notaries, audit firms, casinos and lottery operators;
- consulting and professional services: legal, accounting, engineering, advertising, marketing, design, translation and expert services;
- restaurants and cafés within Yerevan (hotel services tied to tourism aside), saunas and bathhouses.
Amendments signed in April 2025 also closed the regime, from 1 January 2025, to real estate transactions, head-office activities and management consulting.
The tax authority looks at what you actually do, not the activity code you picked at registration. If your contracts say "consulting services" or "design", that falls under the ban even if your real work is coding. Make the subject of each contract describe your work accurately.
Quick fit check for freelancers
- Software development, QA, DevOps — usually eligible, as long as contracts don't describe the work as consulting.
- Design, marketing, advertising, translation — not eligible.
- Legal, accounting, management consulting — not eligible.
- If you don't qualify, look at turnover tax (10% for most services) or the general regime.
Employees and payroll
There's no cap on headcount, but the regime doesn't cover payroll. Since 1 July 2023, employee salaries at a micro-business are subject to the standard 20% income tax. Employees born in 1974 or later also pay the social (pension) contribution: 5% on monthly pay up to AMD 500,000, higher above that. The monthly payroll return and payment are due by the 20th of the following month. More in payroll taxes in Armenia.
A sole proprietor working alone, with no staff, has no payroll obligations.
How to apply and what to file
- New business
Apply within 20 days of registering your IE or LLC. - Existing business
Apply by 20 February of the year you want to switch. - Annual report
File a turnover report covering all activities by 1 February of the following year — even when no tax is due. - If you have staff
Monthly income tax and social contribution return by the 20th.
If your annual turnover goes over AMD 24 million, you lose the regime and move to the general regime or, if you meet the conditions, to turnover tax. Agree the recalculation with your accountant in advance. All key dates are in our tax reporting calendar.
Common mistakes
- Choosing the regime by activity code instead of by real work and contract wording.
- Not tracking turnover in dram. Keep a running total; at AMD 18–20 million, start planning your next regime.
- Assuming "zero tax" also covers salaries. Payroll taxes are always due.
- Missing the 1 February annual report.
- Splitting one business into several IEs or LLCs to stay under the limit. That invites reassessment.
Frequently asked questions
What is the turnover limit for the micro-business regime in Armenia?
Total turnover from all activities in the previous year must not exceed AMD 24 million. It counts everything you receive, not profit, and foreign-currency income is converted into dram.
Can a software developer use the micro-business regime in Armenia?
Software development, QA and DevOps are usually eligible, as long as contracts don't describe the work as consulting. The tax authority looks at what you actually do and how contracts are worded, not your activity code.
Do micro-businesses in Armenia pay tax on employee salaries?
Yes. The regime does not cover payroll: since 1 July 2023, salaries are subject to the standard 20% income tax, and employees born in 1974 or later also pay the pension contribution.
What reports does a micro-business file in Armenia?
A micro-business files an annual turnover report covering all activities by 1 February of the following year, even when no tax is due. If you have staff, there is also a monthly payroll return by the 20th.
Not sure your work qualifies?
We'll review your contracts, pick the right regime and handle your filings in English.
Sources: Tax Code of Armenia — arlis.am; State Revenue Committee — src.am; PwC — Armenia, Taxes on corporate income; Repat Armenia — Recent Tax Changes and Associated Obligations; Orbitax — 2025 activity exclusions.