Armenian IT startups to get tax relief

YEREVAN, June 13. /ARKA/. Armenia’s parliament passed in the first reading the bill about state support in IT sector and amendments to the country’s laws about income tax and profit tax on Thursday.

The first deputy minister of economy Garegin Melkonyan said the law envisages a new system of state support to IT. He said IT sector is a priority and is quite a promising field that may contribute to the country’s economic development. The bill suggests creating favorable conditions for start-up companies in terms of taxation.

A simplified procedure is set for creating start-ups that will have to pay 0% income tax and only 10% profit tax during the first three years.

Both new IT companies and software developer groups of not more than 15 employees that have operated without registration so far and have IT promotion ideas can take the advantage of the bill, Melkonyan said.

The deputy minister also said the new tools will allow creating up to 300-350 new jobs every year and at least triple the number of start-ups every year. In particular, the privileges will help bring the number of start-ups to 30 compared to about 10-12 per year today.

In 2000, Armenian government announced IT sector is of priority in the country’s economic development. As of January 1, 2014, there were over 380 IT companies in Armenia, 159 of them have foreign capital involved. Armenia’s IT sector records about 20-25% growth every year. Its share in the country’s GDP is 3.8%. IT growth was 22% as of the end of 2013. Annual turnover of the sector is $380 million. According to the country’s IT development strategy, the turnover is expected to rise to $1 billion by 2018. –0--

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10:53 06/13/2014