The Agreement between the Federal Republic of Germany and the Republic of Armenia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital was signed on June 29, 2016th. It requires its entry into force is subject to approval of the legislative bodies of both Contracting States.
The National Assembly of Republic of Armenia has ratified the signed Agreement on June 29, 2016, in Yerevan, which entered into force in 2017, from 1 January.
The agreement aims to develop the economic relations between the countries, improve tax cooperation and ensure effective and proper collection of taxes, avoidance of double taxation and thus reduce the negative impact of obstacles to income and property taxes on international trade and investment, as well as to create a predictable and stable tax environment.
The agreement specifically defines the resident status (Article 4), the concept of permanent establishment (Article 5), real property income and business operations profit of provisions relating to the receipt (articles 6, 7), maritime and air transport, affiliated enterprises and provisions related to dividends (Articles 8, 9, 10), interest and royalties regulatory provisions (Articles 11, 12) as well as other procedural requirements and conditions necessary for the Agreement.
In addition to these commitments, the Republic of Armenia on the basis of reciprocity, will assume a number of responsibilities, including:
- Ensure that the competent authorities notify the competent authorities of any material changes in tax laws in the German side (Article 2, paragraph 4)
To ensure that Armenia's authorities to exchange information with the German competent authorities of the Federal Republic, are properly considered for the implementation of the provisions or internal laws or the execution, and a guarantee that it will be considered that information received by the confidential and will be disclosed only to persons or authorities (including courts and administrative bodies) relating to the relevant tax assessment or collection, or authorities shall use the information only for such purposes (Article 25, paragraphs 1 and 2) .
The agreement is subject to ratification by a German side and shall enter into force on the day of the exchange (under Article 31) and operate until terminated by a Contracting State in which the procedure is defined in Article 32 of the Agreement.