ANCA says U.S.-Armenia treaty should prevent double taxation

PanARMENIAN.Net - A new U.S.-Armenia treaty reducing the threat of double taxation would, by removing a major barrier to bilateral trade and investment, strengthen the economic relationship between the U.S. and Armenian governments and also the enduring bonds of friendship between the American and Armenian peoples, according to a recent letter from the Armenian National Committee of America to Secretary of the Treasury, Timothy Geithner.

According to Asbarez, in a two-page August 5, 2011 letter, ANCA Chairman Ken Hachikan explained that this urgently needed and long-overdue Double Tax Treaty “would create a clear framework for investors and individuals that have business activities or own and manage a property or any other taxable asset in both jurisdictions. It would prevent many tax disputes from arising, and provide clear avenues for tax dispute settlement.”

He also stressed that the absence of an existing and operational agreement, “seriously and substantially impacts the quality and quantity of commerce between the U.S. and Armenia,” noting, in particular, that: “The lack of clarity that results from the absence of this treaty forces potential investors to add an element of uncertainty, potential costs, and new risks into their business calculations. This uncertainty represents a material, often decisive, deterrent for potential U.S. investors in Armenia.”

Hachikian stressed that: “Very simply, the lack of a U.S.-Armenia Double Tax Treaty makes Armenia a less attractive place for American corporations to invest, while, at the same time, its absence makes the U.S. less attractive for Armenian companies doing business abroad.” He added that: “Armenia’s neighbor, Turkey, has a Double Tax Treaty, as do Russia, Ukraine, and all the Baltic states: Estonia, Latvia, and Lithuania. Israel, Ireland, Italy, Greece, and other countries with large diasporan communities in the United States also have such accords in place, yet Armenia does not.”

The ANCA first advocated a Double Tax Treaty as early as 2004, and has long been on record encouraging the White House to put in place a U.S.-Armenia Trade and Investment Framework Agreement.