ARMENIA Trends and Developments Contributed by: Roustam Badasyan, Artur Manukyan, Marianna Grigoryan and Davit Baklachyan, Badasyan Consulting LLC
ing AMD5 million. This definition plays a central role in determining the applicable tax treatment, creating a tiered system that distinguishes between ordinary and substantial winnings. Calculation of taxable income Article 145 of the Tax Code sets out two methods for calculating taxable income from gaming, as outlined here. • Non-large winnings – income is calculated as the positive difference between the total winnings credited to a player’s account (gross gaming rev- enue (GGR)) during the reporting year and the total bets or participation fees paid (excluding those directly linked to a large winning). • Large winnings ‒ income is calculated as the posi- tive difference between the amount of the large winning and the specific bet or participation fee associated with it. Importantly, until recently, the status of free spins and free rolls was ambiguous under Armenia’s regulatory framework. The most recent regulatory updates clari- fied that such promotional features are included in the calculation base of the GGR. This clarification ensures that these promotional incentives are accounted for consistently and transparently, aligning taxation with actual net gains. Applicable tax rates Under Article 150 of the Tax Code, the following rates apply: • 5% for winnings (excluding large winnings) derived from licensed gaming organisers; • 10% for large winnings received through a tax agent; and • 20% for winnings outside these categories, such as those obtained from unlicensed organisers. This tiered system rewards participation in regulated gaming while penalising engagement with unlicensed or unregulated platforms. Role of tax agents Under Article 152 of the Tax Code, tax agents are gen- erally exempt from the obligation to withhold income
tax on player winnings, with the exception of large winnings and promotional lottery prizes. This shifts much of the compliance burden to players them- selves, though large winnings are directly taxed at source. Taxation of Gaming Operators Special regimes Historically, gaming operators were subject to simpli- fied or special taxation regimes. • Lotteries – until 2018, organisers paid a fixed fee. From 2018 onwards, organisers of draw-based, non-draw, and/or combined lotteries became sub- ject to turnover tax at a rate of 25%. • Totalisers (betting) ‒ from 2018 to 2020, these were taxed under the patent tax system. These regimes provided predictability but did not nec- essarily reflect the true profitability of operators. General tax regime In 2013, casinos and gaming operators were exempt- ed from fixed-fee taxation. Instead, they only paid state duties, and their income was not considered part of taxable gross income. However, this prefer- ential treatment was revoked in 2021, when income generated from casinos, gaming, and online gaming was included in gross income and became subject to a corporate income tax rate of 18%. Since 2020, the organisation of totalisers and internet totalisers has also been included within the scope of corporate income tax. VAT exemption Gaming activity organisers, including those involved in online gaming, have been consistently exempt from VAT. Since 2020, the organisation of totalisers and internet totalisers has also been exempted from VAT. This exemption remains in force and represents one of the few remaining fiscal incentives for the sector. State duties and licensing fees State duties have historically varied depending on location and type of activity.
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