Tax residents are allowed to credit foreign taxes paid on income received abroad against their Armenian tax liabilities. The amount of foreign tax credit is limited to the amount of Armenian corporate tax on such income. Excess foreign tax credit may be carried forward.
Below is a summary of the available methods for various income tax streams based on domestic law.
The credit column shows the type of foreign tax credit granted when the receiving country receives a payment. Four abbreviations are used for the type of foreign tax credit available:
- NC means no credit but foreign withholding taxes can be deducted.
- OC means ordinary credit, i.e., credit for foreign withholding taxes (e.g., withholding taxes).
- IC means indirect credit, i.e., credit for underlying corporate taxes as well as foreign withholding taxes.
- ND means no credit and no deduction for any foreign withholding taxes incurred.