Cambodia and the United Arab Emirates (UAE) are expected to sign a Double Taxation Agreement (DTA) soon seeing that negotiations on the content are 96 per cent complete, the General Department of Taxation (GDT) stated.
According to a GDT statement, the discussion covered in detail the remaining articles from the second round of talks, with one segment left for both parties to discuss and decide with their respective leaders.
The discussion, conducted via video conferencing on August 21, was led by Seng Chea Seth – director of the GDT’s Department of Law, Tax Policy, and International Tax Cooperation – and Hamid Nasr Mohamed Abdul Qadir, an economic adviser of UAE’s Ministry of Economy.
“Out of a total of 31 articles of the DTA, both sides have agreed on 30 articles. For the remaining Article 1, [both parties] would continue to discuss and ask for a decision from their respective leaders to complete the negotiations as soon as possible,” GDT said.
Cambodia Chamber of Commerce vice-president Lim Heng explained that the DTA is “very important for investors, especially countries with large investments”.
Investors would be encouraged to invest in countries where their government has entered into a DTA as taxpayers need not pay double tax if they have already declared in one country.
The agreement also expedites the flow of export and import between partner countries, making it more efficient.
In addition, investors can invest directly in partner countries as well as export goods under special conditions.
“With the agreement, investors who want to return the profits to their country pay only 10 per cent, instead of paying higher. When Cambodia has more DTAs with other countries, it would be able to attract more investment,” he told The Post.
Hong Vanak, an economics researcher at the Royal Academy of Cambodia, said investors want this agreement because it helps them earn some profit after tax.
“A series of [recent] achievements, such as the new investment law, transportation infrastructure system, bilateral and multilateral free trade agreements and the DTA, all help to make Cambodia attractive to investors,” he said.
Apart from ongoing DTA negotiations with UAE, Cambodia also signed a comprehensive economic partnership with the middle eastern country on June 8, 2023.
As of Feb 28 this year, Cambodia has signed DTAs with 11 countries or regions - Singapore, China, Brunei, Thailand, Indonesia, Vietnam, Hong Kong,
Malaysia, South Korea, Macau and Turkiye, the GDT said.
It is in the process of discussion with partner countries such as Japan, the Philippines and Laos.