Secretary Mnuchin Stresses Need to Prevent Double Taxation on Trade and Investment
LOS ANGELES—Treasury Secretary Steven Mnuchin, during a World Affairs Council event in Los Angeles Monday, had a constructive exchange with Armenian National Committee of America Chairman Raffi Hamparian about the mutual benefits of a U.S.-Armenia Double Tax Treaty.
In response to Hamparian’s question, Secretary Mnuchin explained that the purpose of such accords would be to “make sure that there is no double tax for trade and investment.” He added, “we want to make sure other countries tax our companies fairly when they’re doing business there, and visa-versa.” During recent Congressional testimony, the Secretary committed to devoting Treasury Department resources to pursuing a Tax Treaty with the Republic of Armenia.
“I am pleased that ANCA Chairman Raffi Hamparian and I had a chance to share the advantages of a new U.S.-Armenia Double Tax Treaty with Secretary Mnuchin,” remarked ANCA National Board member Aida Dimejian. “It is crystal clear that Secretary Mnuchin understands the benefits of treating companies fairly with respect to taxation – whether they are conducting business from the United States into Armenia or the other way around,” Dimejian added.
“The ANCA is eager to see concrete progress on a Double Tax Treaty coming out of the much-awaited meeting this March 19th in Washington, DC of the U.S.-Armenia Trade and Investment Framework Agreement council,” noted Dimejian. “As soon as the terms have been agreed upon – very likely based upon the current U.S. model treaty – and a final accord signed, we look forward to engaging with members of the U.S. Senate, in particular those serving on the Foreign Relations Committee, who are charged, under our Constitution, with ratifying all American treaties.”
Earlier this month, Secretary Mnuchin testified before the U.S. House Financial Services Committee and agreed – in response to direct questioning by Representative Brad Sherman (D-CA) – to commit Treasury Department officials to pursue a new U.S.-Armenia Double Tax Treaty, a long-overdue bilateral accord that will remove barriers to the growth of U.S.-Armenia economic relations.
Rep. Sherman was joined by Rep. David Valadao (R-CA) in collecting the Congressional signatures of their House colleagues on a letter to Secretary Mnuchin in support of the Tax Treaty. He referenced the legislators in his question to the Secretary, asking whether, in response to their calls to action, the Treasury Department would dedicate 28 hours (the number of Congressional signatures collected at that time) to negotiating this agreement. Secretary Mnuchin replied in the affirmative, noting: “Yes, I can commit the 28 hours.”
The Valadao-Sherman letter to Secretary Mnuchin had over 30 Congressional signatures.
In recent weeks, Armenia’s Prime Minister Karen Karapetyan and Finance Minister Vardan Aramyan have each welcomed the opportunity to discuss the US-Armenia Tax treaty during their March meetings with U.S. leaders.
Since the signing of the U.S.-Armenia Trade and Investment Framework Agreement (TIFA) in 2015, the ANCA has worked closely with a broad range of legislators to encourage the Department of Treasury to negotiate a new U.S.-Armenia Double Tax Treaty. In September 2017, the ANCA joined with Paul Korian and Peklar Pilavjian, leading U.S. investors in Yerevan’s landmark Marriott hotel, for a series of Capitol Hill and State Department meetings making the case for an updated compact. Internationally renowned Tufenkian Artisan Carpets; Triada Studio, the Armenia-based creator of the Apple Design Award-winning Shadowmatic Game; and PicsArt, the Yerevan and San Francisco based makers of one of the most popular photo-editing, collage and drawing apps, are among the many firms urging the lifting of barriers to U.S.-Armenia trade through the implementation of a new double tax treaty.
A U.S.-Armenia Double Tax Treaty would establish a clear legal framework for investors and individuals that have business activities in both jurisdictions, preventing double taxation and facilitating the expansion of economic relations. It would also help reinforce the friendship of the American and Armenian peoples, anchoring Armenia to the West, and providing Yerevan with greater strategic options and independence in dealing with regional powers.
The U.S. has double tax treaties with many small countries, including Estonia, Jamaica, Latvia, Lithuania, Malta, and Slovenia. Armenia has double tax treaties with many advanced countries, including Austria, Belgium, Canada, China, France, Italy, the Netherlands, Poland, Russia, and the United Kingdom.