Armenia's 1% IT tax — who qualifies and how to apply

What is Armenia's 1% IT tax?

Effective January 1, 2025 through 2031, companies certified under Armenia's High-Tech Industry Law can opt into a 1% turnover tax regime instead of the standard 18% corporate income tax. The 1% applies to gross revenue, not profit — which dramatically reduces the effective tax burden for asset-light IT operations where most revenue converts to margin.

The practical effect: an IT company billing $1M annually pays $10,000 in turnover tax under the regime. Under the standard system, the same company with a 40% margin would owe $72,000 in corporate income tax — before payroll taxes. For teams already comparing Yerevan against Tbilisi, Dubai, or EU locations, this is usually the single largest line-item difference.

Who qualifies for the High-Tech Registry?

Certification is administered through the High-Tech Registry under Armenia's Ministry of High-Tech Industry. Eligible sectors include:

• Software development—product companies, outsourcing and development studios, SaaS operations
• IT services & R&D—technical services, research and development operations, engineering centres
• Gaming & fintech—game studios (mobile, PC, console), financial technology, and related high-tech activities

The four conditions

• High-Tech Registry membership—register with the Ministry of High-Tech Industry; processing takes 2–4 weeks
• 90%+ qualifying revenue—at least 90% of revenue must come from government-defined high-tech activities
• Clean tax compliance—the company must maintain good standing with Armenian tax authorities
• Annual election by February 20—companies must opt into the regime by February 20 of each tax year

Beyond the 1%: the full incentive stack

The 1% headline rate gets the attention, but Armenia's high-tech framework stacks several additional incentives on top — particularly valuable for companies relocating engineering teams or running R&D operations:

• 200% R&D salary deduction—companies can deduct 200% of qualified R&D salaries (capped at 50% of taxable income)
• 10% researcher income tax—employees performing certified R&D pay 10% income tax versus the standard 20%
• 60% wage tax refund—for new hires and labour migrants
• 50% PIT reimbursement—when relocating with 10+ employees who haven't previously worked in Armenia
• 70% salary subsidy—for 3 years, for each highly qualified professional attracted from abroad
• 5% dividend tax—plus 10% on interest income; capital gains on property are generally exempt
• ~50 double taxation treaties—including the US, UK, Germany, France, China, Russia, UAE, and Singapore
• Free Economic Zones—0% CIT, 0% property tax, 0% customs duties for in-zone operations

1% regime vs standard Armenian taxation

Comparing Armenia with Georgia or other jurisdictions more broadly — talent, banking, cost of living, honest downsides? See the Armenia vs Georgia comparison in our full Why Armenia guide.

Four steps from zero to the 1% rate.

The process is genuinely fast by international standards — the longest single step is usually the bank account, not the tax certification. Here is the realistic sequence:

The step that actually takes longest: banking

Bank account opening for foreign-shareholder LLCs takes 2–4 weeks at the major Armenian banks — Ameriabank, Acba Bank, Ardshinbank, Inecobank, and Evocabank. Choosing the right bank for your shareholder profile and country mix saves weeks; this is one of the highest-value things our partner network handles. A personal visit of 1–2 days is typically required.