Containers are unloaded at Sihanoukville Autonomous Port (PAS). Post staff.
The Philippines has become the 13th of Cambodia’s trading partners to sign a “Double Taxation Agreement” (DTA). It is expected that the agreement will help promote economic cooperation and attract more Filipino investors to bring their capital into Cambodia.
The DTA was signed by Prak Sokhonn, Cambodian Minister of Foreign Affairs and International Cooperation of the Cambodian government, and Ralph G. Recto, Secretary of Finance of the Philippines, on behalf of their respective governments.
The signing took place earlier this week, during Prime Minister Hun Manet’s official visit to the Philippines, with the prime minister and Philippines leader President Ferdinand Romualdez Marcos Jr. acting as witnesses to the ceremony.
Cambodian has signed DTAs with a total of 13 partners, 11 of which are already in effect. These include Thailand, Singapore, Brunei, China, Vietnam, Malaysia, Indonesia, South Korea and Turkey, as well as the Hong Kong and Macau Special Administrative Regions.
Agreements with Laos (signed on December 4, 2024) and the agreement with the Philippines are not yet in effect.
According to the General Department of Taxation, technical-level negotiations have already been completed with Myanmar, and DTAs are currently being negotiated with Japan, Morocco, the UAE, France and Qatar, among others.
Lor Vichet, vice-president of the Cambodia Chinese Commerce Association(CCCA), told The Post on February 13 that DTAs not only help to avoid double taxation but also play an important role in attracting foreign direct investment and increasing international competitiveness.
He explained that they prevent or eliminate tax discrimination between local and foreign companies, providing mechanisms for resolving tax disputes, as well as mechanisms for exchanging information between state authorities on tax evasion.
Vichet added that in Cambodia, double taxation is eliminated by deducting an amount equal to the tax paid in foreign countries from domestic taxes paid by residents of the Kingdom.
“The vigorous negotiating and ratifying of DTAs with regional countries – and in the near future with Western counterparts – signifies Cambodia’s openness and transparency towards fostering a fair and conducive investment climate, without discrimination towards foreign entities conducting business or making cross-border investments in the Kingdom,” he said.
Lim Heng, vice-president of the Cambodia Chamber of Commerce (CCC), noted that the agreement will also allow for taxation on income in locations where both parties generate profit. He believed this will further enhance trade between the two countries.
“When a country has a DTA with Cambodia, the tax on income in our country (Cambodia) is only 10%, but without such an agreement, the tax could reach 14%. Therefore, as Cambodia signs more DTAs, it will attract more investment through incentives on income tax,” he said.
“Cambodia’s new investment laws also provide several tax incentives,” he added.
