Guide to VAT Taxability and Rates in Armenia

What is the VAT rate in Armenia?

The standard VAT rate in Armenia is 20%. There is no reduced rate or separate Digital Services Tax (DST) applicable to SaaS or electronic services.

Are SaaS and digital services taxable in Armenia?

Yes. SaaS and electronic services are subject to VAT in Armenia. How VAT is applied depends on the transaction type:

What is zero-rating, and when does it apply?

A zero-rated supply is technically taxable but at a 0% rate. In Armenia, this applies to exported services, including cross-border B2C and B2B sales where the seller is an Armenian resident and the buyer is outside Armenia. Keep in mind that zero-rated export supplies are still counted toward the AMD 115 million registration threshold.

What is the reverse charge mechanism?

Under the reverse charge mechanism, the VAT-registered Armenian buyer, rather than the foreign seller, accounts for and remits VAT directly to the tax authority. This applies when a non-resident company sells SaaS or electronic services to a VAT-registered Armenian business (B2B). The non-resident seller does not charge VAT on the invoice but should include a note indicating that the reverse charge applies.

Are there exemptions?

Entity-level exemptions do not apply in Armenia for B2B SaaS and B2C SaaS transactions. The key distinction is not about exemptions, but about who accounts for the tax. B2B and B2C supplies are not exempt; the difference lies in the collection mechanism (forward charge vs. reverse charge).

Input tax credit restrictions may apply if the buyer uses services for exempt activities such as financial services or education.

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