SCC on Taxation of Non-Resident Workers

The State Revenue Committee (SRC) considers it necessary to inform once again, in light of public discussions regarding the taxation of income earned by residents of the Republic of Armenia outside its borders, that the committee is ready to initiate discussions on changes to the current legislative regulations.

As a result, the existing regulations may include specifics regarding the taxation of certain types of income earned by Armenian resident individuals in foreign countries. Such discussions are already being held with the policymaking body.

The SRC reminds that individuals who have received income taxable in the Republic of Armenia and foreign countries, meaning citizens who have spent 183 days or more in the Republic of Armenia during the tax year, and/or whose center of vital interests is located in Armenia, are obliged under Armenian legislation to calculate and pay income tax at the established rates (for example, in 2023, the income tax rate is 20%).

The amounts of income tax calculated from the earned income are reduced by the amount of tax paid by individuals in foreign countries, which must not exceed the amounts of income tax calculated in the Republic of Armenia. This means that if a resident citizen of the Republic of Armenia has worked in another state, they have an obligation to pay income tax to the extent of the difference between the foreign country’s tax rate and the income tax rate applicable in Armenia. However, if the tax rate paid in the foreign country exceeds that of Armenia, then the citizen does not have any obligation to pay in the Republic of Armenia.