New Incentives to Support the High-Tech Sector in Armenia

27.11.2024

Since 2015, Armenia has incentivized start-ups in the IT sector offering tax benefits like a 0% profit tax rate and a 10% income tax rate. However, these sector-specific exemptions will end on December 31, 2024. To address this, the Armenian Government has introduced a draft law titled to broaden and modernize current incentives.

Key Changes in the Draft Law

1. Expanded Scope

  • Incentives will now cover the broader high-tech sector, including science, and will no longer require entities to be newly established.

2. Proposed Tax Incentives

  • Turnover Tax: Reduction from 5% to 2%.
  • Profit Tax:
  • Salaries of professional staff can reduce gross income by up to 200% (capped at 50% of the taxable base).
  • Targeted financial resources will be taxed based on their utilization, not receipt.
  • Income Tax:
  • Halved to 10% for R&D-related salaries.
  • Accelerated depreciation for fixed assets used in R&D.

3. Budgetary Support

  • Tax Returns:
  • Up to 100% income tax return for new hires under 30 in high-tech jobs.
  • 50% return on training and labor migrant salaries.
  • Total support capped at 50% of income tax paid during the reporting period.

4. Eligibility Period

Incentives apply from January 1, 2025, to January 1, 2032, with extensions for entities moving to the general tax.

Your contacts at SCHNEIDER GROUP: 


How we can help

The proposed law represents a significant step in fostering innovation across a broader spectrum of industries, offering more inclusive and impactful support for Armenia’s growing high-tech sector. SCHNEIDER GROUP may consult you on both eligibility and implementation of the law. We may also handle the certification process of the company to enable profiting of tax incentives as well as the accounting relation thereto.