Choosing a Tax Regime for Individual Entrepreneurs and Legal Entities in Armenia: the 20-Day Rule
The 20-Day Rule: What You Need to Know
Under Armenian law, any newly registered individual entrepreneur (IE) or legal entity is placed on the general taxation system by default.
To switch to a preferential system such as turnover tax or micro-entrepreneurship, you must submit a special application to the tax authority.
⚠️ Critical deadline: the application to change the regime must be filed within 20 calendar days from the date of registration.
Consequences of Delay
If the application is not filed on time, the company automatically remains on the general taxation system until the end of the current year.
The general regime means a higher tax burden (including 20% VAT) and more complex monthly reporting. For small and medium-sized businesses, this is often economically impractical. The next opportunity to switch to a preferential regime will be only from January 1 of the following year.
How to Make the Right Choice
The choice of regime depends on several factors:
- Type of activity (activity code): determines eligibility for benefits (for example, the 1% IT benefit).
- Annual turnover: indicates whether the conditions for the micro-entrepreneurship regime (0% tax) are suitable.
- Employees: affects mandatory social contributions and income tax.
Need Help Choosing?
Don’t risk your profit due to a calculation mistake.
We created a free online calculator that will help you:
- determine the most beneficial tax regime for your business
- find out your exact tax rate
- calculate potential savings
👉 Go to the EasyTaxes online calculator
Make sure your accountant didn’t forget to file the application — it matters. Or you want to manage your accounting in Armenia yourself?
