THE PHILIPPINES and Cambodia have signed a double-taxation agreement (DTA), which the Department of Finance (DoF) expects to boost foreign investment and trade.
Finance Secretary Ralph G. Recto said in a statement: “The signing of this DTA is a crucial step towards improving the integrity of our tax system.”
“By eliminating tax barriers and ensuring a fair and transparent framework, we are not only attracting greater foreign investment into the Philippines but also reinforcing our trade ties within the region,” he added.
Mr. Recto and Cambodian Deputy Prime Minister and Minister of Foreign Affairs and International Cooperation Prak Sokhonn signed the DTA on Feb. 11.
It will take effect after ratification by the two countries’ respective legislative bodies.
The deal was reached after three rounds of negotiations, with the final round ending in Manila last year in April.
The DoF said the agreement will eliminate double taxation on income earned in the two countries, deter tax evasion, and enhance economic cooperation, aligning with commitments under the Association of Southeast Asian Nations Forum on Taxation.
The agreement is also expected to reduce fiscal barriers and stimulate bilateral trade and investment.
“Specifically, the agreement covers various aspects of taxation, including income from business profits, dividends, interests, royalties, capital gains, and other sources of revenue, ensuring a fair and efficient tax framework for businesses and individuals operating in both jurisdictions,” it said.
It involves the exchange of tax information and dispute resolution mechanisms in line with the Base Erosion and Profit Shifting and tax transparency initiatives and standards, the DoF said. — Aubrey Rose A. Inosante
