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Lukewarm response to Russian tax proposal

A Russian diplomat has urged the Cambodian government to sign a double taxation treaty, but local officials say it is low on their list of priorities.

Chheang Vun, chairman of the Cambodian National Assembly’s Commission for Foreign Affairs and International Cooperation, said Russian Ambassador Dmitry Tsvetkov proposed the tax convention during a meeting on May 10.

He said that while the proposal had been tabled and was open for consideration, Cambodia was keen to sign double taxation agreements with ASEAN partners first before looking further afield.

“We have been pursuing this type of agreement with some countries in ASEAN,” he said yesterday.

“We need to deal with countries inside our community first, before we look at countries that already have investment agreements with Cambodia, such as Russia, China, South Korea and India.”

However, Vun said the Cambodian government recognises the advantages a double taxation agreement could provide.

Pointing to a mutual investment protection treaty that Cambodia and Russia inked last December, he said a double taxation treaty would extend assurances offered to investors from both countries by ensuring that they are not taxed twice.

A double taxation treaty “would attract more capital inflows to our country as well as provide capital protections”, he said, adding that the Cambodian government supports the idea but needs to ensure it complies with international standards.

Joseph Lovell, managing partner at law firm BNG Legal, explained that double taxation agreements can build investor confidence and protect business interests.

“If I were a Russian doing business in Cambodia, I would hope to get at least a partial tax credit from my [home] country,” he said. “But without a legal agreement or treaty, it would be hard to be sure that I wouldn’t be taxed twice.”

He added that if any double taxation agreements are signed, it would benefit Cambodia’s overall tax collection.

Late last month, state news agency AKP reported that Cambodia had finalised an agreement on double taxation with Singapore – the first for the Kingdom.

Additional reporting by Kali Kotoski



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