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December 15, 2021

Armenian National Assembly ratifies Law introducing concept of electronic services in the Tax Code

On 25 November 2021, the Armenian President signed the law ratified by the National Assembly introducing the concept of electronic services and related regulations (the Law) in the Republic of Armenia Tax Code.

According to the Law, the provision of electronic services will be considered the provision of services via an information and telecommunication network (electrical connection), including via the internet, the provision of which is impossible without the use of information technology.

The list of electronic services will be defined by the Government and published on the official webpage of the Tax Authority.

The Law prescribes that the place of provision of electronic services1 is considered:

  • The Republic of Armenia, if the electronic service is received by an organization, sole entrepreneur or notary registered in Armenia.
  • The Republic of Armenia, if the electronic service is received by the permanent establishment (branch, representative office) of a nonresident organization in Armenia, including when the electronic services are directly received by the nonresident organization, but they are used (consumed) by their permanent establishment (branch, representative office) in Armenia.
  • The Republic of Armenia, if the electronic service is received by a nonresident organization, the permanent place (management place) of whose executive body is located in Armenia and such organization actually carries out entrepreneurial activity in the country, as well as receives services.
  • A specific country (can also be Armenia), if the electronic service is received by an individual not considered to be a sole entrepreneur or a notary (Individual) and any one of the following conditions is met:
    • The place of residence of the Individual receiving the electronic service is in the specific country.
    • The location of the bank where the Individual receiving the electronic service has opened a bank account to make payments for those services; or the location of the operator of the electronic money computation system through which the Individual receiving electronic services makes payments for electronic services, is in the territory of the specific country.
    • The network address used by the Individual for receiving electronic services is registered in the specific country.
    • The international country code of the telephone number, which is used by the Individual for receiving the services or is indicated when making payments is issued by the specific country.

A nonresident organization that does not have a permanent establishment in Armenia and provides electronic services to Individuals must be registered with the Tax Authority in accordance with the procedure defined by the Government.

The moment of provision of electronic services to the Individuals will be the last date of the quarter in which the payment for the electronic service is made in proportion to the amount paid.

The reporting period for the nonresident organization for filing a VAT return with the Tax Authority and making a VAT payment arising from the electronic services shall be the reporting quarter and be due on the 20th of the month following the reporting quarter.

The list of electronic services that fall under the above regulations is to be defined by the Government, and published on the official website of the Tax Authority by the end of the year. Based on the information currently at hand, the following service providers will be affected by the Law:

  • Advertising service providers through information networks

  • Platform providers through information networks

  • Providers of rights to use electronic books

  • Radio or television broadcasting services

  • Providers of movie streaming services

The Law will enter into force on 1 January 2022.

Next steps

Taxpayers should take action to understand and meet the VAT requirements arising after the adoption of the Law, including:

  • An initial assessment of whether these requirements apply to a foreign service provider

  • Obtaining clarifications from the Tax Authority where the position is not clear

  • VAT registration

  • VAT compliance and routine communication with the tax authorities when needed


For additional information with respect to this Alert, please contact the following:

Armenia Ernst & Young CJSC, Yerevan



  1. According to the Tax Code, if the place of provision of services is Armenia the services are taxed under VAT at a rate of 20%.

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