Cambodia is mulling Double Taxation Avoidance (DTA) deals with seven countries, naming the Philippines, Laos, Myanmar, France, Japan, Morocco, and the United Arab Emirates, the General Department of Taxation (GDT) said in a press release last week.
Cambodia implemented DTAs with Singapore, China, Thailand, Brunei, Vietnam, Indonesia, China’s Hong Kong Special Administrative Region, Malaysia and South Korea, while DTAs with China’s Macau Special Administrative Region and Turkey are in the process of ratification.
DTAs give confidence and certainty to foreign investors through various benefits, the GDT said.
“DTAs not only avoid double taxation but also play an important role in attracting foreign direct investment and increasing international competitiveness,” it stated in the press release.
They also 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.
In Cambodia, double taxation is eliminated by deducting from tax an amount equal to the tax paid in foreign countries by residents in the Kingdom.
Lim Heng, Vice President of the Cambodia Chamber of Commerce, said that when Cambodia has more DTAs with trade partners, it will help the country’s trade and investment activities.
DTAs with more countries will also expand opportunities for local investors and businessmen to invest abroad.
“The DTA is important for the investment environment in Cambodia. Investors want this deal so that they can avoid paying double tax here and in their respective countries when they transfer money,” Heng said.
DTAs, new investment law and bilateral and multilateral free trade agreements are helpingCambodia to attract more investment, he said.
Last Thursday, Cambodia and the Philippines finished the third round of DTA talks, in which both sides stressed the importance of the DTA to boost bilateral cooperation.
The country has two institutions responsible for collecting taxes. One is the GDT, which focuses on interior taxes such as income tax, salary tax, value-added tax and property tax, and the other is the General Department of Customs and Excise (GDCE), which collects taxes on goods entering and leaving the country.
Cambodia collected more than $3.6 billion as taxes in 2023 through the GDT, slightly exceeding the targets set in the 2023 Law on Financial Management and surpassing 2022’s tax revenue.
(khmertimeskh)
