Philippines, Cambodia finalize deal on double taxation

Philippines, Cambodia finalize deal on double taxation

MANILA, Philippines — The governments of the Philippines and Cambodia have concluded the double taxation agreement (DTA) in a bid to improve trade and investment system mechanisms.

In a statement, the Department of Finance (DOF) said it led the conclusion of the draft DTA that aims to protect Filipinos’ taxing rights and increase trade and investment across economic borders.

Finance Secretary Ralph Recto said the conclusion of the DTA marked a significant milestone in strengthening economic ties between the Philippines and Cambodia.

“Through this effort, we have not only complied with our commitment to completing the Southeast Asia DTA network but we have also ensured that the taxing rights of Filipinos here and abroad are equitably preserved and protected,” Recto said.

Under the terms of the DTA, both countries agree to mitigate the burden of double taxation on individuals and businesses operating across borders, which may contribute to the elimination of barriers to trade and investment and encouragement of cross-border economic activities.

The DTA encompasses taxation of income earned by citizens and residents of the Philippines and Cambodia.

It also outlines how each country’s tax administration shall impose and credit taxes paid in accordance with the tax rules in both countries.

Negotiations on the DTA began in 2018 in Manila and was followed through in 2019 in Siem Reap.

Following the conclusion of the draft, the Philippines expects to hold the signing of the DTA in October this year.