Cambodia is currently seeking to expand its network of double tax agreements (DTAs) with other countries to eliminate double taxation and prevent tax evasion, in a bid to build investor confidence.
According to Khmer Times, Seng Piseth, the Bureau Chief of Fiscal Policy and International Cooperation at the General Department of Taxation, said DTAs aim to attract more investors and make Cambodia more competitive internationally.
“Signing DTA agreements with more countries is to build confidence, attract more investors and make Cambodia more competitive internationally,” Piseth said.
Cambodia currently implements DTAs with nine countries and territories, including Singapore, China, Thailand, Brunei, Vietnam, Indonesia, China’s Hong Kong Special Administrative Region, Malaysia, and South Korea. DTAs with China’s Macau Special Administrative Region and Turkey are currently in the process of ratification, according to Khmer Times.
DTAs facilitate the exchange of information between tax authorities of different countries, which enhances tax enforcement against tax evasion, base erosion, and profit-shifting by taxpayers.
In Cambodia, double taxation is eliminated by deducting the tax paid in foreign countries from the tax on the income of the resident of Cambodia. Taxpayers must apply for a certificate of tax residency and provide certain supporting evidence before using the reduced withholding tax rates available under the DTA.
The expansion of DTAs is expected to strengthen the level-playing field in tax payment in Cambodia.
What Are The Institutions Responsible for Collecting Taxes in Cambodia?
- The General Department of Taxation focuses on interior taxes such as income tax, salary tax, value-added tax, and property tax.
- General Department of Customs and Excise, which collects taxes on goods entering and leaving the country.
According to Director General Kong Vibol of the General Department of Taxation, the department has collected over USD $2 billion in tax income in the first half of 2023, which accounts for 58% of the yearly plan. The GDT aims to collect USD $3,57 billion through tax revenue collections in 2023.
The pursuit of DTAs by Cambodia is intended to bolster the country’s investment environment and attract more foreign businesses, which will contribute to the country’s economic growth and development.
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