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Armenia - Income Tax

Armenia - Income Tax

Taxation of international executives

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Sources for Income Tax Section: The Republic of Armenia (RA) Tax code was adopted by RA National Assembly 04 October 2016 and entered into force on 1 January 2018, except for some of articles which will come into force on 1 January 2020. Some provisions of RA Tax code came into force on 1 January 2017. The code replaced the laws on different types of taxes including laws “On income tax”.
 
RA Law “On compensation for fallen or damaged servicemen during the defines of the Republic of Armenia”.

Tax returns and compliance

When are tax returns due? That is, what is the tax return due date?

20 April.

What is the tax year-end?

31 December.

What are the compliance requirements for tax returns in Armenia? 

Residents

Employers are required to calculate income tax on a monthly basis from their employees’ salaries and transfer these amounts to the state budget, no later than the 20th day of the month following the month of calculation.

The Armenian resident individual receiving the income from sources other than Armenian legal entities shall declare it to the tax authorities and shall pay the tax themselves.

Non-residents

Income tax on income received by non-residents from tax agents is normally withheld at the source.

Amounts withheld (imposed) by a tax agent shall be considered as the final amount of the income tax for non-residents.

Non-residents will have an obligation to submit an Annual Income Calculation only in the event they receive an income from Armenian sources but not through tax agents.

Tax rates

What are the current income tax rates for residents and non-residents in Armenia? 

Residents

Income tax rates on wages and salaries of Armenian citizens, foreign citizens, and persons without citizenship effective starting 1 January 2018 are shown in Table A.

Table A

Monthly taxable income Tax rate
Up to AMD150,000 23% of taxable income
From AMD150,000 to AMD2,000,000
AMD34,500 plus 28% of the taxable income exceeding AMD150,000
Over AMD2,000,000 AMD552,500 plus 36% of the taxable income exceeding AMD2,000,000

Non-residents

The income tax on salaries and wages and the income deemed equal thereto shall be calculated and withheld (imposed) at the rates specified in Table A.

Residence rules

For the purposes of taxation, how is an individual defined as a resident of Armenia?

The Tax Code provides that the following persons shall be deemed to be tax residents.

  • Individuals, who, during tax year (from 1 January to 31 December, inclusive), totally has spent 183 days or more in the Republic of Armenia (RA).
  • Individuals, whose center of vital interests are in the RA.
  • Individuals, who are in the civil service of the RA, but are temporarily working outside Armenia.

Is there, a de minimus number of days rule when it comes to residency start and end date? For example, a taxpayer can’t come back to the host country/territory for more than 10 days after their assignment is over and they repatriate.

No.

What if the assignee enters the country/territory before their assignment begins?

No special implications. The residency of the assignee does not depend on the beginning of the assignment.

Termination of residence

Are there any tax compliance requirements when leaving Armenia? 

There are no special requirements upon leaving the country/territory. In case of residency, the Annual Income Calculation should be submitted for the tax year.

What if the assignee comes back for a trip after residency has terminated?

No special implications.

Communication between immigration and taxation authorities

Do the immigration authorities in Armenia provide information to the local taxation authorities regarding when a person enters or leaves Armenia?

Yes (on a case-to-case basis).

Filing requirements

Will an assignee have a filing requirement in the host country/territory after they leave the country/territory and repatriate?

Being treated as tax resident in Armenia, the assignee will have an obligation to submit Annual Income Calculation in host country/territory (Armenia) for tax year.

Economic employer approach

Do the taxation authorities in Armenia adopt the economic employer approach to interpreting Article 15 of the Organisation for Economic Co-operation and Development (OECD) treaty? If no, are the taxation authorities in Armenia

The Economic Employer approach is not adopted by Armenian tax authorities.

De minimus number of days

Are there a de minimus number of days before the local taxation authorities will apply the economic employer approach? If yes, what is the de minimus number of days?

No.

Types of taxable compensation

What categories are subject to income tax in general situations?

As a general rule, all types of remuneration and benefits received by an employee for services rendered constitute taxable income. These include, but are not limited to, the following:

  • wages and salaries 
  • interests 
  • dividends
  • royalties 
  • income from leasing 
  • benefits-in-kind.

Tax-exempt income

Are there any areas of income that are exempt from taxation in Armenia? If so, please provide a general definition of these areas.

The following are several types of income that are exempted from the income tax:

income from securities, such as:

  • income from sale of stocks and other investment securities
    • interest or discount received from government bonds and other government securities as well as bonds issued by the Pan-Armenian Bank
    • income from trading in government securities and bonds issued by the Pan-Armenian Bank.
    • the property and monetary means which have been inherited or received as a gift, received from individuals
  • money and food aid provided to individuals by non-profit organizations in the process of their ordinary activities
  • property and cash provided by foreign as well as intergovernmental organizations without compensation
  • insurance compensation
  • scholarships and stipends.

Expatriate concessions

Are there any concessions made for expatriates in Armenia?

There are no concessions for expatriates in Armenia.

Salary earned from working abroad

Is salary earned from working abroad taxed in Armenia? If so, how?

Residents are taxed on worldwide income. Non-residents are taxed only on Armenian-sourced employment income.

Taxation of investment income and capital gains

Are investment income and capital gains taxed in Armenia? If so, how?

There is no capital gains tax in Armenia. However, incomes received from the tax agents as a result of the sale of the property are subject to 10 percent Income tax. (Except for the below cases)

  • The second sales of property of personal, family or household use (including, an apartment, private house (including, unfinished (semi-constructed)), agricultural and residential lands, garage, as well as a car of personal use) within tax year are subjected to 20 percent income tax, if this property is purchased and alienated during the same tax year .
  • The sales of an industrial and other property of commercial and public significance, including buildings, constructions (including unfinished (semi-constructed)), lands of industrial, subsurface and other production significance or that of the share belonging to a person in the ownership of property are subjected to
    • 20 percent income tax, if total incomes received from natural persons not deemed individual entrepreneurs and notaries
    • 10 percent income tax, if total income received from the taxpayers other than above mentioned persons

Dividends, interest, and rental income

Table B

Type of Income Rate
Interest 10%
Royalty 10%
*Rentals 10%
**Dividends received by foreign citizens and individuals with no citizenship 5 10%
**Dividends received by Armenian citizens6 5%

* In case the sum total of the rentals received during the tax year exceeds AMD58,35 million, an additional income tax at a 10 percent rate shall be calculated for the exceeding part.

**Tax Code provides an opportunity to refund from the state budget tax amounts paid to the state budget from dividends, in case during the year these dividends are received they are invested according to the procedure established by the legislation in the charter or share capital of the same RA resident entity that pays dividends.

Gains from stock option exercises

Residency status Taxable at:
  Grant Vest Exercise
Resident N Y N
Non-resident (foreign citizen) N Y N
Other (if applicable) N/A N/A N/A

Foreign exchange gains and losses

Not applicable.

Principal residence gains and losses

Not applicable.

Capital losses

Not applicable.

Personal use items

Not applicable.

Gifts

Gifts provided to individuals by tax agents are taxed as other income.

Additional capital gains tax (CGT) issues and exceptions

Are there additional capital gains tax (CGT) issues in Armenia? If so, please discuss?

There is no capital gains tax in Armenia.

Are there capital gains tax exceptions in Armenia? If so, please discuss?

No.

Pre-CGT assets

Not applicable.

Deemed disposal and acquisition

Not applicable.

General deductions from income

What are the general deductions from income allowed in Armenia?

Voluntary cumulative pension contributions performed by the individual and (or) a third party (including employer) are deducted from the gross income in the amount not exceeding 5 percent of the gross income of the individual.

Tax reimbursement methods

What are the tax reimbursement methods generally used by employers in Armenia?

Employers are required to calculate income tax on a monthly basis from their employees’ salaries and transfer these amounts to the state budget. There is no reimbursement method used in Armenia.

Calculation of estimates/prepayments/withholding

How are estimates/prepayments/withholding of tax handled in Armenia? For example, Pay-As-You-Earn (PAYE), Pay-As-You-Go (PAYG), and so on.

Employers are required to calculate income tax on a monthly basis from their employees’ salaries and transfer these amounts to the state budget.

Pay-as-you-go (PAYG) withholding

Not applicable.

PAYG installments

Not applicable.

When are estimates/prepayments/withholding of tax due in Armenia? For example: monthly, annually, both, and so on.

It depends on type of income. If it is salary, income tax withholdings are made for each month, for other type of income, Income tax withholdings are made for each payment.

 

Relief for foreign taxes

Is there any Relief for Foreign Taxes in Armenia? For example, a foreign tax credit (FTC) system, double taxation treaties, and so on?

Income tax payable by residents of the RA shall be reduced by the amount of tax withheld from them in foreign countries/territories, pursuant to the legislation thereof (with the exception of the amount of tax withheld in foreign countries/territories from income subject to deduction from gross income, pursuant to the legislation of the RA). The amount of the deducted (credited) tax should not exceed the amount of the tax payable in Armenia on income received in foreign countries/territories, in accordance with the provisions of Tax Code.

Where the amount of the income tax subject to reduction exceeds the income tax liability respectively for the given reporting year, the amounts of taxes in excess shall be subject to reduction from the liabilities of the following reporting years of the individual.

In addition to above domestic arrangements that provide foreign tax credit, Armenia has entered into double tax treaties with 46 countries/territories to prevent double taxation and allow cooperation between Armenia and other tax authorities in enforcing their respective tax laws.

General tax credits

What are the general tax credits that may be claimed in Armenia? Please list below.

Not applicable.

Sample tax calculation

This calculation assumes a married taxpayer resident in Armenia with two children whose three-year assignment begins 1 January 2018 and ends 31 December 2020. The taxpayer’s base salary is USD100,000 and the calculation covers three years.

  2018
USD
2019
USD
2020
USD
Salary 100,000 100,000 100,000
Bonus 20,000 20,000 20,000
Cost-of-living allowance 10,000 10,000 10,000
Housing allowance 12,000 12,000 12,000
Company car 6,000 6,000 6,000
Moving expense reimbursement 20,000 0 20,000
Home leave 0 5,000 0
Education allowance 3,000 3,000 3,000
Interest income from non-local sources 6,000 6,000 6,000

Exchange rate used for calculation: USD1.00 = AMD485.75 (25 Jan 2019)

Other assumptions

  • All earned income is attributable to local sources.
  • Bonuses are paid at the end of each tax year, and accrue evenly throughout the year.
  • Interest income is not remitted to Armenia.
  • The company car is used for business and private purposes and originally cost USD50,000.
  • The employee is deemed resident throughout the assignment.
  • Tax treaties and totalization agreements are ignored for the purpose of this calculation.

Calculation of taxable income

Year Ended

2018

AMD

2019

AMD

2020

AMD

Days in Armenia during year 365 365 365
Earned income subject to income tax 83,063,250    75,777,000  83,063,250   
Salary 48,575,000    48,575,000    48,575,000   
Bonus 9,715,000  9,715,000  9,715,000 
Cost-of-living allowance 4,857,500  4,857,500  4,857,500 
Net housing allowance 5,829,000 5,829,000 5,829,000
Company car 2,914,500 2,914,500 2,914,500
Moving expense reimbursement 9,715,000  -  9,715,000
Home leave  -  2,428,750   - 
Education allowance 1,457,250    1,457,250    1,457,250   
Total earned income 83,063,250 75,777,000  83,063,250
Other income/Interest 2,914,500 2,914,500 2,914,500
Total income 83,063,250 75,777,000  83,063,250
Total taxable income 83,063,250  75,777,000 83,063,250 
 

Calculation of tax liability

For 2018 the following new income tax rates will apply, which are provided by RA Tax code:

 

2018

AMD

2019

AMD

2020

AMD

Taxable income as above 83,063,250    75,777,000    83,063,250  
Armenian tax thereon 27,892,770  25,269,720  27,892,770 
Less:  -   -   - 
Domestic tax rebates (dependent spouse rebate)  -   -   - 
Foreign tax credits  -   -   - 
Total Armenian tax 27,892,770 25,269,720  27,892,770
Income tax on interest 291,450 291,450 291,450



Immigration

Following is an overview of the concept of Armenia’s immigration system for skilled labor.

(e.g., which steps are required, authorities involved, in-country/territory and foreign consular processes, review/draft flow chart illustrating the process)

This summary provides basic information regarding business visits to, and work authorization for, Armenia. The information is of a general nature and should not be relied upon as legal advice.

Most foreign nationals who intend to engage in active, productive employment in Armenia will need a Residence Card and Work Permit. Depending on the purpose of travel to Armenia and the nationality of the traveller, there are different types of visas that will apply to the occasion, and which vary in their processes and processing times. For all work authorization types, foreign nationals must coordinate with their employer to collect and legalize corporate and personal documentation.

Citizens of EAEU8 member states have the right to unrestricted access to the Armenian labour market. A work permit won’t be require to work in Armenia.

Unless evidence can be provided that one is an EAEU national, a permit will be required to work in Armenia.

Armenia distinguishes further between Non-Visa Nationals and Visa Nationals. Non-Visa Nationals can enter Armenia for business visitor purposes without the need to apply for an entry visa.

However a Non-Visa national may not start working until the appropriate work permit and residence permit has been issued.

Residence permit must be obtained by means of a visa after entering Armenia. The Armenian embassy/consulate abroad or border-control points are responsible for visa applications. The entry visa is typically valid for a short period of time and must generally be converted to a work permit and Residence Card upon arrival in Armenia.

International Business Travel/Short-Term Assignments

Describe (a) which nationalities may enter Armenia as non-visa national, (b) which activities they may perform and (c) the maximum length of stay.

The Government of Armenia provides the list of the countries/territories whose citizens are unilaterally exempted from the requirement of obtaining a visa. Citizens of foreign countries/territories for whom a visa-free regime is set can stay on the territory of the Republic of Armenia for not more than 180 days during one year if no other term is defined by the international agreements of the Republic of Armenia.

There are also certain countries/territories with which Armenia has a visa-free regime according to bilateral and multilateral agreements. If foreign nationals visit Armenia as either tourists or business visitors, they are allowed to enter Armenia using their passports for up to 120 days. This period can be extended for another 60 days.

List of the countries/territories, with visa exemptions for entry into Armenia are the followings:

  • List of countries (PDF 188 KB) (countries/territories whose nationals are exempted from the requirement to obtain a visa to enter Armenia)
  • Visa not required for the citizens of these countries (PDF 322 KB) (countries/territories whose nationals holding the mentioned type of valid passports are exempted from the requirement to obtain a visa to enter Armenia based on the principle of reciprocity).

In Armenia, visitors are generally free to perform the following activities:

  • participating in cultural, sporting, scientific and other events, forums and conferences organized in Armenia
  • implementing technical assistance and short-term humanitarian, charitable and financial support projects
  • taking part in business negotiations
  • carrying out employment activities
  • launching economic activities (founding a commercial organization, founding a branch or representative office of a commercial organization of a foreign State, making an investment in Armenia, carrying out import and export of goods and services)
  • carrying out international air or land carriage of passengers.

Describe (a) the regulatory framework for business traveller being visa nationals (especially the applicable visa type), (b) which activities they may perform under this visa type and the (c) maximum length of stay.

Visa nationals are required to obtain an entry visa to be able to enter into Armenia for business visitor activities. The entry visa is typically issued for single entry unless otherwise provided for by the legislation or the international treaties of Armenia.

Entry visa eligible for in-country/territory extension for a period of up to 60 days.

The Government of Armenia defines the list of the countries/territories whose nationals can obtain an entry visa upon arrival to Armenia (PDF 235 KB) and the list of the countries/territories, whose nationals should apply for an entry visa upon invitation (PDF 418 KB) to the Armenian embassy/consulate in the respective country/territory of residence in order to be allowed to enter Armenia for up to 120 days rolling period.

In regards to the permitted activities and permitted duration of stay, please see previous section.

Outline the process for obtaining the visa type(s) named above and describe (a) the required documents (including any legalization or translation requirements), (b) process steps, (c) processing time and (d) location of application.

Visa nationals can enter Armenia through state border crossing points, on the basis of availability of a valid passport, on the basis of an entry visa or a document attesting the residence status and in case of availability of authorization of an authorized state administration body of the Government of Armenia carrying out border control. Entry visa could be obtained upon arrival in Armenia and upon invitation.

Entry visa is obtained:

  • upon arrival in Armenia (1 day)
  • upon invitation (15-20 working days)

Foreigners may be given an invitation to visit Armenia:

  • by a citizen of the Republic of Armenia residing in Armenia
  • by a foreigner with a residence status in Armenia
  • by legal persons registered in Armenia
  • by state bodies, local self-government bodies of Armenia, embassies, consular offices, and international organizations or their representations accredited in Armenia.

When submitting an invitation to the Ministry of Foreign Affairs of Armenia for approval, the citizens referred to in point (a) above shall submit a passport, the persons referred to in point (b) above — a passport and residence card (special passport of the Republic of Armenia), and legal entities referred to in point (c) above — a carbon copy of the registration certificate issued by the State Register Agency of Legal Entities of Armenia.

The persons referred to in this part shall also submit information on covering by the inviter their living expenses, including those incurred from possible medical aid and departure from Armenia, or an undertaking on covering all those expenses by them, by submitting in both cases a state duty payment receipt.

An invitation shall contain data on the invitee and the inviter, the purpose of the invitation, as well as on the periods of stay of the invitee in Armenia.

Are there any visa waiver programs or specific visa categories for technical support staff on short-term assignments?

No such programs or visa categories are defined under the Armenian legislation.

Long-Term Assignments

What are the main work permit categories for long-term assignments to Armenia? In this context outline whether a local employment contract is required for the specific permit type.

Work Permit (local employment contract for Armenia required)

Work Permit - authorization of an authorized state administration body of the Government of Armenia, which entitles a foreigner to work in Armenia.
Employers of Armenia shall be entitled to conclude an employment contract (contract on delivery of services) with a foreign worker and use their work based on the work permit issued for the foreign worker by the authorized body.
Employer may apply to the authorized body for issuing a work permit for this specific foreigner for a certain time period, by submitting the following documents:

  • application for issuing a work permit
  • foreigner's passport
  • documents of professional education and qualification received by a foreigner certified by consular certification or apostille
  • foreigner's 3x4 colour photo
  • receipt of payment of the state duty (approx. USD55).

Employment contracts

An employment contract (contract on delivery of services) shall be concluded in accordance for the validity period of the work permit. An employment contract (contract on delivery of services) shall also cover issues related to transportation to Armenia of a foreign employee and their family members, social security and insurance thereof, issues related to meeting them, providing with accommodation, keeping on records in the place of residence, and the return thereof.

In case of termination of activities of the employer, the foreign worker shall be entitled to conclude a new employment contract (contract on delivery of services) with another employer for the remaining validity period of the work permit, provided that at least three months are left till the expiry of the mentioned period, and the new employer has obtained the consent of the authorized body.

The employer shall, within five working days upon concluding an employment contract (contract on delivery of services) with a foreigner, submit the duplicate copy thereof to the authorized body, in person or by post or in an electronic form, for the purpose of keeping on records. The authorized body shall, on a regular basis, post on its official website the information on an employment contract and the amendments made thereto.

Provide a general process overview to obtain a work and residence permit for long-term assignments (including processing times and maximum validation of the permit).

Obtaining of work permit by the employer

  1. Document gathering, translations if necessary, etc. (1-2 weeks)
  2. File and submit application with Immigration Authorities to obtain a work permit by the Employer (20-23 business days)

Work permit is issued for a period of validity of an employment contract.

Obtaining of residence permit by the employee

  • Entry visa obtaining (1 day (upon arrival to Armenia) or 15-20 working days (upon invitation))
  • Travel to Armenia (1 day)
  • Book appointment with Immigration authorities and file application for final permit (1-2 days)
  • Attend appointment and provide biometric data for final data 
  • Pick up temporary residence permit (30 days)

Temporary residence permit shall be granted for a period of up to one year with a possibility of extension by one year each time.

Is there a minimum salary requirement to obtain a long term work and residence permit for assignments? Can allowances be taken into account for the salary?

The minimum monthly salary in Armenia is AMD55,000 (approx. USD115), which does not include taxes, social payments, supplements, bonuses and other incentive payments.

Is there a fast-track process which could expedite the visa/ work permit?

No, currently there is no fast-track option for Armenia.

At what stage is the employee permitted to start working when applying for a long term work and residence permit (assignees/ local hire)?

The employee is permitted to start working, when the work permit is obtained by the employer.

Can a short term permit/ business visa be transferred to a long term permit in Armenia?

Technically, it would be possible to transfer a short term permit/ business visa to a long term permit in country/territory. This needs to be reviewed case by case as it is highly depended on the circumstances. For this purpose, the foreign national during the validity of their visa (if required) should start employment relationship with an Armenian employer, who has to obtain a work permit for the foreign national. Based on the work permit the foreign national should apply for temporary residence permit.

If a transfer would not be possible, the applicant would need to leave Armenia.

Is it possible to renew work and residence permits?

The Legislation of Armenia does not provide the possibility to renew the work permit.

It is a possibility to renew the temporary residence permit but, in fact, it can be done according to valid work permit, the extension of which is not provided by the local legislation.

Is there a quota or system or a labour market test in place?

Armenia does not have a quota system.

Employers of Armenia shall be entitled to conclude an employment contract (contract on delivery of services) with a foreign employee and use their work based on the work permit issued for the foreign employee by the authorized body. When issuing a work permit for a foreign worker, the authorized body shall take into account the needs and developments of the labour market of the Republic of Armenia.

With a view of assessing the needs of the labour market of Armenia, a time limit shall be established for the employer upon the decision of the Government of the Republic of Armenia, during which the employer shall be obliged to fill the available vacancies from among the citizens of Armenia.

In case of absence of candidates, to be nominated by the authorized body within the time limit prescribed, who will meet the requirements of the employer, as well as in case of rejection by the employer of the nominated candidate, the employer may find a foreigner meeting these requirements and apply to the authorized body for issuing a work permit.

General Immigration Related Questions

Would it be possible to bring family members to Armenia?

According to the legislation of Armenia, an employment contract (or contract of services provision) shall also cover issues related to transportation to Armenia of a foreign employee and their family members, social security and insurance thereof, issues related to meeting them, providing with accommodation, keeping on records in the place of residence, and the return thereof.

Besides, temporary residence permit shall be granted to every foreigner, if they prove the existence of circumstances justifying their residence in the territory of Armenia for one year and a longer period.

Such circumstance may be the fact of being the spouse, parent or child of a foreigner holding temporary residence permit in Armenia.

Is it possible to obtain a permanent residence permit?

According to the legislation of Armenia, foreigner cannot apply for permanent residence permit except the following cases:

Permanent residence permit shall be granted to a foreigner, if they:

  • proves the existence of a spouse or close relative (parent, child, brother, sister, grandmother, grandfather, grandchild) holding the citizenship of Armenia or special residence permit in Armenia, possesses accommodation and means of living in Armenia and, prior to submission of an application for obtaining permanent residence status, has resided, for at least three years, in Armenia, or 
  • has Armenian national origin or is engaged in entrepreneurial activities in Armenia. 

Permanent residence permit shall be granted for a period of 5 years with a possibility of extension for the same period each time. An application for extension of a permanent residence permit must be filed at least 30 days prior to expiry of the validity period of the permanent residence permit.

What if circumstances change after the Work and Residence application process (e.g., change of employment or personal situation, including job title, job role or salary)

Any change in the term of the employment or personal situation, including job title, job role or salary may require that a new work permit needs to be secured or an appropriate notification to be made.

How long can a permit holder leave Armenia without their permit becoming invalid?

The legislation of Armenia does not contain any regulation on this issue.

Must immigration permissions be cancelled by the end of the assignment/employment?

According to the legislation of Armenia, the work permit shall be terminated, if the validity period of the employment contract (contract on delivery of services) has expired, or the contract has been rescinded.

Are there any penalties for individuals and/or companies in place for non-compliance with immigration law?

Violation by the foreigners visa or residence permit terms or stay in Armenia upon invalid documents, as well as violation of transit traffic through the territory of Armenia shall entail imposition of a penalty in the amount up to AMD100,000 (approx. USD200).

Non carrying by the inviter the costs of inviting a foreigner to Armenia, including their possible medical care and expenses for departure from Armenia, shall entail the imposition of a penalty in the amount up to AMD100,000 (approx. USD200).

Employment of foreigners by the Employers without appropriate residence and work permits shall entail the imposition of a penalty in the amount up to AMD150,000 (approx. USD310). If the employer is a legal entity, the penalty is assigned to the director.

Other Important Items

List any other important items to note, or common obstacles faced, in Armenia when it comes to the immigration processes.

Below you will find a list of other important items to note and the most common obstacles:

  • Payment conform Armenian minimum wage standards 
  • Salary needs to be comparable to a salary of an Armenian employee 
  • Apostilles/Legalization/ Verification process 
  • Translations – certain documents would require an Armenian translation 
  • Inconsistencies in documentation – for example if there is a discrepancy in the name of the applicant as shown on their passport, degree or marriage certificates, the authorities may require further supporting documentation.

FOOTNOTE

1This provision came into force on 1 January 2017 and shall be applicable for the dividends declared after 1 January 2017.

2In terms of RA Tax Code (Article 25), the place where a person’s family or economic interests are concentrated shall be considered the center of the person’s vital interest. Interests of a person shall be deemed; in particular, to be located in RA, if the house or apartment where the person’s family resides is therein, or the principal personal or family property, as well as the principal place of the economic (professional) activity is located therein.

3Certain tax authorities adopt an ‘economic employer’ approach to interpreting Article 15 of the OECD model treaty which deals with the Dependent Services Article. In summary, this means that if an employee is assigned to work for an entity in the host country/territory for a period of less than 183 days in the fiscal year (or, a calendar year of a 12-month period), the employee remains employed by the home country/territory employer but the employee’s salary and costs are recharged to the host entity, then the host country/territory tax authority will treat the host entity as being the ‘economic employer’ and therefore the employer for the purposes of interpreting Article 15. In this case, Article 15 relief would be denied and the employee would be subject to tax in the host country/territory.

4For example, an employee can be physically present in the country/territory for up to 60 days before the tax authorities will apply the ‘economic employer’ approach.

5This provision came into force on 1 January 2017 and shall be applicable for the dividends generated after 1 January 2017.

6This provision came into force on 1 January 2018 and shall be applicable for the dividends generated after 1 January 2018.

7Sample calculation generated by KPMG in Armenia, the Armenian member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on the RA Tax Code No-HO-165-N, 04 October 2016.

8Eurasian Economic Union

© 2019 KPMG Armenia cjsc, a company incorporated under the Laws of Armenia, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

Tax rates are checked regularly by KPMG member firms; however, please confirm tax rates with the country's tax authority before using them to make business decisions.

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