26/07/23

REGULATION: Cambodia in talks to establish more DTAs

As published on: khmertimeskh.com, Wednesday 26 July, 2023.

Cambodia has been in talks with more countries to establish a double tax agreement (DTA) aimed to eliminate double taxation related to income tax and prevent tax evasion and to build confidence among foreign investors.

Currently, Cambodia implements DTAs with foreign countries and territories, said Seng Piseth, bureau chief of the fiscal policy and international cooperation of the General Department of Taxation.

Cambodia currently implements DTAs with Singapore, China, Thailand, Brunei, Vietnam, Indonesia, China’s Hong Kong Special Administrative Region, Malaysia, South Korea, while DTAs with China’s Macau Special Administrative Region and Turkey are in the process of ratification.

DTAs are important to build trust and absorb investment opportunities, Piseth said in a taxation workshop held last week.

“Signing DTA agreements with more countries is to build confidence, attract more investors and make Cambodia more competitive internationally,” Piseth said.

The double taxation agreement provides an information exchange mechanism between the tax authorities of Cambodia and foreign countries to enhance tax enforcement against tax evasion, base erosion, and profit-shifting by taxpayers.

In Cambodia, double taxation is eliminated by means of a deduction from the tax on the income of the resident of Cambodia in an amount equal to the tax paid in foreign countries.

Taxpayers in Cambodia must apply for a certificate of tax residency and provide certain supporting evidence required by the General Department of Taxation of the Ministry of Economy and Finance before using the reduced withholding tax rates available pursuant to the Cambodia – foreign countries double taxation agreement.The DTA is also to strengthen the level-playing field in tax payment in Cambodia, he said.

GDT has collected $2,072 million as tax income in the first half of 2023, accounting for 58 percent of the yearly plan.

The GDT expects that the implementation of tax revenue management for 2023 will be able to achieve the plan stated in the Law on Financial Management 2023 of $3,571 million, its Director General Kong Vibol said in a statement.

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.

Tags

Regulation Cambodia DTAs