ARMENIA Law and Practice Contributed by: Narine Beglaryan, Arianna Adamyan and Anahit Aloyan, Concern Dialog
1. Aircraft and Engine Purchase and Sale 1.1 Sales Agreements 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement Generally, the transfer of ownership upon completion of the sale agreement is relevant for income/profit tax and VAT purposes. The execution of an aircraft or engine sale agreement, including the sale of an owner - ship interest in an entity owning an aircraft or engine, does not, in itself, create an obligation to pay tax in Armenia, irrespective of the location of the asset or the seller’s domicile. 1.1.2 Enforceability Against Domestic Parties Under Armenian law, it is not required for an aircraft sale agreement to be translated, certified, notarised, or legalised in order to be enforceable against a domes - tic party. However, if legal proceedings are initiated before Armenian courts, any documents in a foreign language must be translated into Armenian in order to be admissible as evidence in such proceedings. 1.2 Transfer of Ownership 1.2.1 Transferring Title In Armenia, the title to an aircraft is transferred through a valid written agreement between the seller and the buyer. Although the owner or operator must record the transfer, such registration is declaratory only and does not, in itself, affect the transfer of title. The transfer of title extends to all parts of the aircraft included in the agreement, such as auxiliary power units (APUs). The sale of ownership interests in an entity that owns an aircraft or engine does not, in itself, constitute a transfer of title to the aircraft or engine. In such cases, the legal owner of the aircraft remains the entity, not - withstanding any changes in the ownership structure of that entity. 1.2.2 Sales Governed by English or New York Law Under Armenian conflict of law rules, the owner - ship rights and other proprietary rights over means of transportation and other property subject to state registration are governed by the law of the state in whose public register the rights over such transpor - tation means or property are recorded. Accordingly,
if the recognition of title concerns an aircraft that is already registered, this rule would apply. Where the recognition of title concerns an aircraft that is yet to be registered, the emergence and termination of ownership rights and other proprietary rights over the property that is the subject of the transaction shall be governed by the law chosen by the parties. While Armenian law does not establish specific stat - utory requirements for the form of a bill of sale, to evidence the transfer of title in accordance with the essential elements of a sale and purchase agreement, the bill of sale must include: • a complete description of the aircraft sufficient for identification purposes (including quantity, if applicable); • a clear statement evidencing the full transfer of ownership; and • identification of the parties to the transaction. 1.2.3 Enforceability Against Domestic Parties A bill of sale does not need to be translated, certi - fied, notarised or legalised in order to be enforceable against a domestic party under Armenian law. Transla - tion may be required by competent state authorities only for purposes of filing or record-keeping. If the document is submitted as evidence before an Arme - nian court, an Armenian translation would be required for admissibility purposes (see 1.1.2 Enforceability Against Domestic Parties ). 1.2.4 Registration, Filing and/or Consent From Government Entities An aircraft may be registered in the Republic of Arme - nia if: (b) a municipality of the Republic of Armenia; (c) a citizen of the Republic of Armenia; or (d) a legal entity registered in the Republic of Armenia; and • the aircraft has the aircraft type certificate issued or recognised by the Civil Aviation Committee; or • the aircraft is not registered in another country. • the owner and/or operator is: (a) the Republic of Armenia;
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