ANCA supporters and Rep. Sherman explore next steps for U.S.-Armenia Tax Treaty
Supporters of the Armenian National Committee of America (ANCA) gathered in the prestigious Tom Bradley Room of the famed City Club of Los Angeles for an in-depth discussion with Congressman Brad Sherman (D-CA) about the next steps toward a U.S.-Armenia Tax Treaty and other practical steps the United States can take in partnership with Armenia’s new government to unleash the economic potential of U.S.-Armenia relationship.
Representative Sherman, an accountant by training who serves as a senior member of the House Foreign Affairs Committee, is widely recognized as the leading international tax policy expert on either side of Capitol Hill. He and his supporters reviewed the efforts required to place this accord officially on the U.S.-Armenia bilateral agenda, and explored the legislative and administrative action still needed to see this longstanding ANCA priority realized in the form of a finalized, signed, ratified and functioning treaty.
The program in honor of Congressman Sherman, hosted by longtime Armenian American community leader Michael Mahdesian, was attended by ANCA Chairman Raffi Hamparian, ANCA Western Region Chairman Nora Hovsepian, Marriott Armenia investor Peklar Pilavjian, and a broad array of community leaders.
“We want to thank Congressman Sherman for his pro-active leadership in breaking down the barriers to U.S-Armenia trade and investment, and also to express our appreciation to all those who gathered to support his work, to explore shared priorities, and to help ensure his return to Congress,” said ANCA Chairman Raffi Hamparian. “Today – more than a month after Armenia’s remarkable transition, at the dawn of our second century of U.S.-Armenia relations – we look to see the warm words of welcome offered by our White House and State Department reflected in actual deliverables – concrete progress on policy initiatives to grow our bilateral economic and political relationships.”
In the wake of this April’s peaceful, constitutional political transition in Armenia – a move broadly welcomed by the White House, State Department, and Congress – the ANCA renewed its longstanding drive for a U.S.-Armenia Double Tax Treaty, a good-governance accord needed to break down artificial barriers to the growth of bilateral trade and investment. The Republic of Armenia has expressed its willingness to start treaty talks on the basis of the 2016 “U.S. Model Income Tax Convention,” a standard template used by many nations in reaching agreements with the United States. This model treaty prioritizes the transparent exchange of information, a hallmark of good governance and a statutory check, enforced by both parties, against attempted “non-taxation or reduced taxation through tax evasion or avoidance.”
Following the signing of the U.S.-Armenia Trade and Investment Framework Agreement (TIFA) in 2015, the ANCA has been working closely with Congressman Sherman and his legislative team 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.
In February, 2018, Rep. Sherman was joined by Rep. David Valadao (R-CA) in collecting over 30 Congressional signatures on a letter to Secretary Mnuchin in support of the Tax Treaty. During a House Financial Services Committee hearing just days later, Secretary Mnuchin agreed – in response to direct questioning by Representative Brad Sherman (D-CA) – to commit Treasury Department officials to pursue a new 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.