U.S. Treasury Secretary Steven Mnuchin received a Congressional clarion call to action from Armenian Caucus Co-Chair David Valadao (R-CA), senior Foreign Affairs Committee member Brad Sherman (D-CA), and 29 of their U.S. House colleagues to renegotiate the existing, outdated Double Tax Treaty with Armenia, an obsolete Cold War-era accord – recognized today by the U.S. but not Armenia – that was negotiated with the now defunct U.S.S.R. more than four decades ago.
On the same day, Secretary Mnuchin, responding to growing Congressional interest, testified that the Treasury Department will dedicate staff resources to pursuing a U.S.-Armenia Double Tax Treaty.
“We commend Representatives Valadao and Sherman and their colleagues – collectively representing over 22 million Americans – for taking concrete steps to eliminate obstacles to enhanced U.S.-Armenia trade by calling for a new U.S.-Armenia Tax Treaty,” said Armenian National Committee of America (ANCA) Board Member Aida Dimejian. “Beyond the immediate benefits of preventing double taxation, such an accord would reinforce the friendship of the American and Armenian peoples, facilitate the expansion of bilateral economic relations, thereby deepening Armenia’s ties to the West and providing Yerevan with greater strategic options and independence in dealing with regional powers.”
“American and Armenian business have close ties and it’s time to end the double taxation currently imposed on businesses in both nations,” explained Rep. Valadao. “By renegotiating our tax treaty with Armenia, we can continue to strengthen our relationship with a close ally while encouraging trade and investment in our great nations,” he continued.
Modernizing our double tax treaty with Armenia is long overdue,” explained Rep. Brad Sherman (D-CA), who pressed Secretary Mnuchin on the issue during the House Financial Services Committee hearing earlier today. “This is not only an opportunity to reaffirm our friendship with Armenia, but to also create new opportunities for investment and growth.”
The Congressional letter notes that “The existing Soviet-era treaty does not reflect the increasing complexity of a globalized world and the friendship between the American and Armenian peoples,” then calls upon Secretary Mnuchin to, “prioritize the renegotiation of the double tax treaty with Armenia.” The letter also underscores that “the complexities of the international tax structure should not discourage American and Armenian companies from conducting business with each other due to double taxation. The need for updated guidelines that reflect the current state of U.S.-Armenian relations and recently passed tax reform legislation cannot be understated.”