Foreign tax claims in cross-border insolvency proceedings. Options applicable to Armenia

Abstract

The globalization of business implies global and straightforward legal solutions to various aspects of activities of multinational companies. This paper discusses the global regulation of one such aspect — proceedings against multinationals in economic distress. The research provides a background of international, regional and domestic aspects of a cross-border insolvency framework. The paper focuses on one particular element in cross-border insolvency proceedings — international tax claims. In certain jurisdictions, foreign tax claims are unenforceable in the absence of respective international treaties, which might pose certain obstacles to the development of cross-border insolvency law. An implied solution is the expansion of treaty networks for mutual recognition of tax claims, which might be a more complicated solution than the removal of restrictions in domestic legal acts. Armenia, a developing economy, is among the states, which are hesitant about shifting to a modified universalist regime of regulation of cross-border insolvency proceedings. Covering the specific case of the Armenian insolvency law, this paper will help get an insight into some aspects of cross-border insolvency law and analyze the necessity for the Armenian insolvency legislation to incorporate “modified universalist” cross-border insolvency rules in line with the international practice.