The following key expense types are not deductible or have limited deductibility for Armenia tax purposes:
- Expenses that are not supported by relevant documents are not deductible (but undocumented expenses may be deducted to the extent of AMD 3 million per month and AMD 300,000 per transaction);
- Fines and penalties levied by State and municipal bodies are not deductible;
- Interest on loans provided by entities other than banking and financial institutions are not deductible to the extent the interest rate exceeds twice the rate of the Central Bank. The Central Bank key refinancing interest rate is 9.25% (increased from 8%, effective from 15 March 2022);
- Interest on loans provided by entities other than banking and financial institutions is not deductible to the extent the loans exceed twice the value of net assets of the borrower;
- Charitable contributions in the nature of aid, food for individuals, organizing socio-cultural events, etc. exceeding 0.25% of the gross income are not deductible;
- Expenses incurred on the training of staff outside Armenia exceeding 4% of the gross income for the tax year (capped at AMD 3 million per employee) are not deductible;
- Management fees paid to a non-resident entity in excess of 2% of gross income are not deductible;
- Foreign business trip expenses in excess of 5% of gross income are not deductible;
- Representative expenses exceeding 0.5% of the gross income of the reporting year (capped at AMD 5 million) are not deductible; and
- Voluntary funded pension contributions made by employers for an employee in excess of 7.5% (5% prior to 1 July 2018) of the salary of an employee are not deductible.
There are certain expenses deductible to a limited extent related to a specific industry or taxpayer type.