Clint O’Connell (Partner & Head of Cambodia Tax Practice) was recently quoted in the Khmer Times article: Double-tax deals signed and more in the pipeline.
The article discusses the Double Taxation Agreements (“DTAs”) recently signed by Cambodia with six other ASEAN member states and new measures to come. In addition to these six signed DTAs, the government is actively negotiating with the remaining ASEAN members to reach a deal on DTAs with them. The goals are to facilitate investment, accelerate free-trade and avoid excessive tax when engaging in transactions or doing business in either country with a relevant tax treaty in place.
Clint observes that “the importance of having a strong network of DTAs is very significant for Cambodia, particularly when it is looking to compete for foreign direct investment with neighboring countries in South East Asia”.
DFDL established its headquarters in Cambodia in 1995 and became the country’s first officially authorized foreign investment advisory consulting and tax firm.
Clint assures that DTAs encourage foreign investment in Cambodia by providing relief from double taxation for foreign investors in Cambodia under the form of a tax credit system.
He also explains that “DTAs can reduce exposure to Cambodia’s domestic withholding taxes [in some cases down to 0%] on cross-border transactions such as dividends, interest, technical fees and royalties and they also provide certainty to investors by providing guidance on key tax issues concerning taxing rights, tax residency, the creation of a permanent establishment by a non-resident and how certain industries may be taxed in-country such as international transportation”.
In Clint’s opinion, Cambodian taxes typically covered under the DTAs may include tax on income, withholding tax on dividends, interest and royalties, minimum tax, advance tax on dividend distributions and tax on salary.
Clint also notes that DTAs also help governments combat the erosion of their tax base by providing information-exchange provisions whereby the tax authorities of the respective DTA signatories may seek information about taxpayers from their counterparts to assist them in their investigations.
The full article “Double-tax deals signed and more in pipeline” can be found here: https://www.khmertimeskh.com/50721144/double-tax-deals-signed-and-more-in-pipeline/.
Partner & Head of Cambodia Tax Practice