2022 marked the designation of the Republic of Armenia as one of the most attractive competences for the development of high-tech business in the post-Soviet area.
This circumstance is arising from the implementation of state support in the sphere of information technologies, especially the provision of tax incentives:
Profit tax — 0% (total rate 18%),
Value added tax (VAT) — 0% (total rate 20%),
Income tax — 10% (Total rate 21%),
for dividends-5% — Total rate of 21%).
The specified tax regime may be applied for by commercial organizations and individual entrepreneurs registered in the Republic of Armenia, having up to 30 employees and established for the following activities:
1. Software development;
2. Consulting services on legal regulation of banking activities;
3. Computer system management activities;
4. Data processing, networking and related activities;
5. Activities related to web portals. implementation of educational, research programs in the field of information technology;
6. Design, testing and production of electronic systems, computer animation and modelling, and design and testing of integrated circuits.
In addition, applicants must meet a number of other requirements and follow the procedure established by the RA Law “On State Support for the Information Technology Sector”.
There is also a necessity to take into account the decision of the Government of the Republic of Armenia No. 399- Լ “On Approval of the Procedure for Providing State Support to Commercial Organizations and Individual Entrepreneurs in the Information Technology Sector”, which does not apply to commercial organizations and individual entrepreneurs that have received a certificate in accordance with the procedure established by the law “On State Support for the Information Technology Sector”, during the validity of the certificate and according to which:
State support is provided to commercial organizations and individual entrepreneurs operating in the field of information technology (hereinafter referred to as “Beneficiaries”) who simultaneously meet the following conditions:
1. 90 percent or more of the income from the activities carried out (sales turnover) is income from activities included in the following groups of economic activities:
- Production of electronic components;
- Manufacture of computers and peripherals;
- Production of communication equipment;
- Production of airplanes, spaceships and other aircraft;
- Publication of computer programs;
- Software development, consulting and related activities in the field of computer technology;
- Data processing, posting information on the web and related activities, activities related to web portals.
2. the number of employees engaged under civil contracts of labor and performance of works or provision of services for the corresponding month of state support has increased by at least 10 compared to the number of employees of this beneficiary according to data registered as of March 1, 2022;
3. the newly hired employees mentioned in the previous paragraph, in the period from September 1, 2021 to February 28, 2022, were not employees under civil law contracts for the performance of works and the provision of services in the Republic of Armenia; 4. as of the day preceding the day of filing the application, they do not have 100 thousand obligations on income controlled by the tax authority exceeding monetary funds, with the exception of income tax obligations, which must be fully fulfilled.