Armenia’s micro-business turnover threshold rises from AMD 24 million to AMD 50 million
Armenia’s annual turnover threshold for micro-businesses may rise from AMD 24 million (about $66.6 thousand) to AMD 50 million (about $138.7 thousand) from January 1, 2027.
The Ministry of Finance drafted the amendments to the Tax Code and published them on the government’s unified portal for draft legal acts.
Micro-business status is a preferential alternative tax regime for small companies in Armenia. The government’s 2026–2031 programme provides for at least doubling the annual turnover threshold for the regime and for linking the right to use it to proper compliance with tax obligations.
For individuals who are not registered as sole proprietors, the threshold stays at AMD 24 million. They may carry out only the 23 activities listed in Annex 3 to the Code, including clothing and shoe repair, language teaching, event hosting and hotel services in guest houses, and only on orders from the public.
Five-year ban. Companies and sole proprietors that commit certain Tax Code violations will be barred from Armenia’s alternative tax regimes, the turnover tax and micro-business status. The ban will apply in the year the violation is recorded and the following four years. Only violations recorded in administrative acts after the law takes effect will count, and if an act is challenged in court, the taxpayer stays in its regime until the court ruling takes effect.
New related-party criteria. If a company or sole proprietor stops operating and another taxpayer carries out the same activity at the same address within 3 months, the two will be treated as related parties if at least two of the following conditions apply:
- at least 30% of the staff from the previous 6 months work for the new taxpayer,
- the new taxpayer uses the previous one’s trademarks or IP addresses,
- at least 80% of the previous suppliers work with the new taxpayer,
- at least 80% of the previous customers buy from the new taxpayer,
- the new taxpayer operates at least one of the previous one’s cash registers.
Related parties identified this way will also be barred from the turnover tax and micro-business status.
Limits on expense deductions. For invoices issued from January 1, 2027, profit tax payers will not be able to deduct from gross income the cost of services and works received from turnover tax payers, and turnover tax payers will not be able to deduct the cost of services and works received from micro-businesses.
The draft also proposes extending profit tax concessions for agriculture by another year, to December 31, 2027, until mechanisms for taxing agricultural output are developed.
According to the justification, the soft administration toolkit in the alternative regimes has encouraged businesses to fit into them artificially and avoid taxes. The Ministry of Finance estimates that the draft will not significantly reduce state budget revenue or increase spending.
