Analyses & Studies

Tax benefits of the IT sector

The growth of the information technology sector has become a key driver of economic development in many countries, and Armenia is no exception. Its booming IT industry has attracted worldwide attention. To foster this growth, Armenia has introduced tax incentives to support the sector.

The Armenian government has recognized the importance of the IT sector to the country's economic growth and has put in place various tax incentives to attract local and foreign investment. Some key aspects of the Armenian tax system include:

- Tax exemptions for start-ups: In order to encourage innovation, the Armenian government offers start-ups tax exemptions for the first three years of operation. This allows start-ups to reinvest their profits in their business, which promotes expansion and job creation.

- Corporate tax reduction: IT companies registered in Armenia are subject to a reduced corporate tax rate of 10%, while the standard rate is 20% for other sectors. This reduction allows IT companies to retain more of their profits, which encourages growth and investment in the sector.

- Value Added Tax (VAT) Refund: To support research and development (R&D) activities, Armenia refunds VAT on imported equipment and materials for IT companies engaged in R&D. This policy reduces costs for companies developing new technologies. This policy reduces costs for companies developing new technologies and products, thus encouraging innovation.

Armenia's tax system demonstrates a real willingness to promote the growth of the IT sector.