On 6 May 2026, Armenia enacted Law HO-234-N introducing a comprehensive package of amendments to the Tax Code. Most amendments entered into force on 1 July 2026, while certain provisions will become effective on 1 January 2027.
While the law contains numerous technical, clarifying and administrative changes across the VAT, profit tax, excise tax and personal income tax regimes, several amendments are expected to have a notable impact on taxpayers.
Foreign Currency Transactions and Operations Accounting Rules
One of the key amendments is the comprehensive revision of Article 16 of the Tax Code, which governs the tax accounting treatment of transactions and operations denominated in foreign currencies.
Under the previous rules, taxpayers were often required to determine income, expenses and tax bases using exchange rates applicable on the dates when supporting documents were issued. Under the new framework, the applicable exchange rate is generally aligned with the date on which the relevant item is recognized for tax purposes under the Tax Code. As a result, income, expenses and tax bases will, in most cases, be translated using the exchange rate published by the Central Bank of Armenia on the preceding working day. An exception applies to foreign currency exchange transactions, for which the exchange rate published by the Central Bank on the date of the transaction will be used.
The amendment is expected to simplify foreign currency tax accounting and reduce inconsistencies arising from the application of different exchange rates to the same transaction.
Expanded Rules for Transaction Adjustments and Goods Returns
The amendments to Article 42 of the Tax Code expand the list of circumstances in which taxpayers may adjust previously completed transactions.
Under the previous rules, transaction adjustments were permitted only in limited cases, including certain returns of defective or non-compliant goods. Under the new framework, post-sale adjustments may generally be made whenever goods are returned, whether in whole or in part. In such cases, the original settlement document remains valid, while the taxpayer is required to issue an adjustment document reflecting the revised transaction terms.
The amendment is expected to provide greater flexibility in dealing with returns and to simplify the correction of VAT and other tax consequences arising from post-sale changes.
VAT Exemption Rules Updated
The amendments to Article 64 of the Tax Code introduce changes to the VAT exemption framework.
First, the existing VAT exemption applicable to the confiscation or donation of goods to the central government has been expanded to include transfers of goods to the local governments (municipalities), reflecting the broader scope of eligible public recipients.
In addition, a new VAT exemption has been introduced for tourism services provided by tour operators and travel agents to foreign tourists, as well as for agency services rendered by travel agents, provided that the relevant trips, tours and excursions are conducted within the territory of Armenia.
The amendments are expected to clarify the VAT treatment of transfers to public authorities and support the development of Armenia’s tourism sector by reducing the VAT burden on services provided to foreign visitors.
Other Notable Amendments
Beyond the key provisions discussed above, the law also introduces a number of technical and clarifying amendments, including:
- revised rules for determining an asset’s initial cost basis;
- clarification of VAT obligations for non-resident suppliers without a permanent establishment in Armenia;
- changes to the VAT treatment of exports and EAEU transactions;
- clarification of the profit tax treatment of share issues and disposals;
- revised deductibility limits for representation expenses;
- clarification of the timing and procedures of income recognition and taxation for non-resident organizations and individuals; and
- various excise tax and tax administration amendments.
