Knowledge base / Taxes
Turnover tax in Armenia: rates, limit and deadlines in 2026
Who can use it
Resident companies and sole proprietors whose turnover, excluding VAT, did not exceed AMD 115 million last year. A new business can choose it straight away: a sole proprietor has 20 days from registration. An existing business switches by applying before 20 February, and the regime applies from 1 January.
Branches and permanent establishments of foreign companies cannot use it. Since 2025, legal and notarial services are excluded too. Some other activities face restrictions, so check your activity code before you apply.
Rates by activity
Main rates since 2025
- Trade: 10%.
- Manufacturing: 7%.
- Works, services and other activities: 10%.
- Catering: 12%; other catering revenue: 20%.
- Rent, interest, royalties and sale of assets: 10%.
- Sale of recyclable materials: 5%.
- IT activities on the government list: 1%, until 31 December 2031.
If you run several activities, revenue from each one is calculated and taxed separately.
Cost deductions and the minimum tax
Since 2025, you can reduce the tax by a percentage of the documented costs for the quarter. Direct costs count, and so do administrative and selling expenses. The tax cannot, however, fall below a minimum.
- Trade
Deduction: 9.5% of costs. Minimum: 1% of revenue. - Manufacturing
Deduction: 5% of costs. Minimum: 3% of revenue. - Catering
Deduction: 9% of costs. Minimum: 3.5% of revenue. - Works and services
Deduction: 6% of costs. Minimum: 4.5% of revenue.
If the minimum stops you using the full deduction, the unused costs carry forward to later quarters. Costs only count with paperwork, mainly e-invoices and cash register receipts.
Worked example
A sole proprietor in trade has quarterly revenue of AMD 10 million and documented purchases of AMD 8 million.
- Tax before deduction: 10M × 10% = 1,000,000.
- Deduction: 8M × 9.5% = 760,000.
- Tax due: AMD 240,000, or 2.4% of revenue. The 1% minimum (100,000) does not apply.
Without paperwork for the purchases there is no deduction, and the bill is the full million. That is AMD 760,000 more every quarter.
The AMD 115 million limit
Track your turnover cumulatively from 1 January. If it goes over AMD 115 million, you move to the general regime and become liable for 20% VAT. From then on you issue invoices with VAT and file a VAT return every month by the 20th. If you are heading towards AMD 90–100 million, update your prices and contracts for VAT in advance. Ask an accountant to confirm the exact switch-over point for your case.
Deadlines
- Application to switch to turnover tax: before 20 February.
- Quarterly return and payment: by 20 April, 20 July, 20 October and 20 January.
- Payroll taxes for staff: monthly, by the 20th.
All the dates for the year are in our tax reporting calendar. For a comparison with the other regimes, see Sole proprietor taxes in Armenia.
Common mistakes
- Forgetting rental income and asset sales, so the limit is crossed without notice.
- Buying without e-invoices and paying tax at the full rate.
- Applying the 1% IT rate without checking the government list.
- Lumping all activities together. Rates, deductions and minimums are calculated separately for each.
- Assuming the regime exempts you from import VAT. Customs VAT is due under any regime.
The government is discussing changes from 2027, including raising the micro-business limit to AMD 50 million. For now these are plans, not law.
Frequently asked questions
What is the turnover tax rate in Armenia for services?
Works, services and other activities are taxed at 10%, as is trade. Manufacturing is 7%, catering 12%, and IT activities on the government list 1% until 31 December 2031.
Can I deduct expenses under turnover tax in Armenia?
Since 2025 you can reduce the tax by a share of documented quarterly costs, for example 6% for services and 9.5% for trade. The tax cannot fall below a minimum, and costs need paperwork such as e-invoices.
What happens if my turnover exceeds AMD 115 million in Armenia?
You move to the general regime and become liable for 20% VAT. From then on you issue invoices with VAT and file a VAT return every month by the 20th.
When are turnover tax returns due in Armenia?
Returns and payments are quarterly, by 20 April, 20 July, 20 October and 20 January. The application to switch to turnover tax must be filed before 20 February.
Find out what you will actually pay
We compare turnover tax with the general regime, file your application and quarterly returns, and watch the limit for you.
Sources: State Revenue Committee — rates, deductions and minimums from 2025; PwC — turnover tax and VAT; Tax Code of Armenia — arlis.am; Ministry of Finance — amendments from 2025; EY — 1% rate for IT; ARKA — micro-business threshold plans.