ANCA and the Work to Secure a New U.S.-Armenia Double Tax TreatyWednesday, December 5, 2018
The Armenian National Committee of American has made securing a new U.S.-Armenia Double Tax Treaty one of its priorities in order to advance and encourage U.S. investment in Armenia. To provide an update on the ANCA’s efforts on that front, Asbarez reached out to the organization’s Communication Director Elizabeth Chouldjian, who via email responded to some questions.
Asbarez: Tell us about why the ANCA’s pushing for a tax treaty. We’re familiar with your work on Artsakh, foreign aid, and the Armenian Genocide, but can you tell us – in concrete terms – how a bilateral tax accord will help Armenia?
Elizabeth Chouldjian: Simply put – a Double Tax Treaty will boost U.S.-Armenia trade and investment, a long-term ANCA priority, by removing the threat of businesses needing to pay taxes on the same income to both the U.S. and to Armenia. Currently, the lack this treaty creates legal uncertainty, deterring potential U.S. investors, diverting investment flows, and placing U.S. businesses at a competitive disadvantage in Armenia.
Asbarez: What’s the history? Have the U.S. and Armenia ever have a Double Tax Treaty?
E.C.: Well, yes and no. Back in 1973 the U.S.S.R. signed a rather rudimentary tax treaty with the United States, which applied, in a sense, to Armenia since it was part of Soviet Union. But, when Armenia regained independence in 1991, the new government made it clear that they are not party to old Soviet agreements. The U.S., for its part, considers the old Soviet accord to still be in force. In any event, that nearly half-century-old treaty is obviously outdated and obsolete, all the more so because only one part considers it bound by its terms.
Asbarez: Does the United States have a Double Tax Treaty with smaller countries like Armenia?
E.C.: Absolutely. The United States has working Double Tax Agreements with Latvia, Lithuania, Estonia, and Jamaica, among other countries with smaller economies.
Asbarez: What would it take to cement a new tax treaty between the United States and Armenia?
E.C.: Once the terms are ironed out, very likely based on model accords that Armenia and America have negotiated with other countries, the U.S. Senate and Armenian Parliament would need to ratify the treaty before it goes into force.
Asbarez: What is the ANCA’s role?
E.C.: We’ve generated broad, bipartisan Congressional support for a Tax Treaty, including among members of the Senate Foreign Relations Committee, the panel that would need to approve his accord before it moves to the full Senate. Parallel to this, we have brought together U.S. businesses operating in Armenia – from Marriott and PicsArt to Tufenkian and Grant Thornton – to communicate their support for this treaty with their U.S. legislators. And, finally, we are engaging directly with the Trump Administration to get moving on negotiations with their Armenian counterparts.