Thursday, July 27 2017 18:44
Naira Badalian

Armenian Finance Ministry appeals to partners from US in October to exclude double taxation

Armenian Finance Ministry appeals to partners from US in October to exclude double taxation

ArmInfo. In October, Armenia will again propose the US to conclude a treaty on the elimination of double taxation. Minister of Finance of Armenia Vardan Aramyan stated this in a conversation with journalists after the government meeting on July 27.

According to him, the issue of canceling double taxation with the US has always been on the agenda of the Armenian-American relations. During the last 10 years, the minister said, this issue was listed among the priority ones in the Armenian Ministry of Finance. The Minister recalled that in June 2017, Armenia joined the 15th action "Organization for the Development of Economic Cooperation within the framework of the program to prevent the destruction of the tax base and the transfer of profit" (BEPS), along with 68 countries around the world, which allows us to interpret the treaty in a uniform way Against double taxation. Becoming a party to the agreement, the country establishes clear rules of the game in the tax field and raises the reliability of the country from the point of view of the investor. In view of the above, the Ministry of Finance plans in October to contact partners from the US with a request to exclude double taxation.

Nevertheless, Vardan Aramyan found it difficult to name any deadlines for concluding a treaty on avoidance of double taxation, since the parties still have something to work on. At the same time, the agreement concluded between the Soviet Union and the United States, to date, according to the minister, is overdue and irrelevant, only for the simple reason that the Republic of Armenia is not the legal successor of the USSR. In addition, the American side argues its refusal by saying that it sees no difficulties for US companies from the absence of such an agreement. Yerevan also believes that even in the absence of obvious difficulties at this stage, the elimination of double taxation may be a barrier to the pursuit of mutual investment, since the prospect of paying taxes can scare off potential investors twice.

Armenia has similar treaties already with 47 countries, the last agreement was recently signed with Israel.  The purpose of these agreements is to eliminate the double taxation in foreign trade between the two states, to prevent tax discrimination against economic entities of the parties, to exclude double taxation of property and income, and to create a predictable and stable tax environment for business. The issue of exclusion of double taxation between Armenia and the US has been discussed for over 20 years - since 1994 the Armenian government has raised this issue. In 2000, during the Armenian-American intergovernmental meeting, a question was raised about the need to conclude a treaty. Since then, although preparatory work is under way to conclude a treaty, in fact, the talks themselves have not started.

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