Cambodia has secured Double Taxation Agreements (DTA) with 11 nations and territories, nine of which are currently in effect.

The DTAs with Turkiye and China’s Macau Special Administrative Region are slated to become operational in January 2024 and are in the final stages of procedural completion, according to a press release from the General Department of Taxation (GDT) dated September 25.

The release highlighted a seminar in Preah Sihanouk province, focusing on disseminating Cambodian investment laws and sub-decrees. These agreements are a strategic move to meet ASEAN Framework obligations, aiming to attract international trade and investment and combat tax evasion on both national and international levels.

According to GDT deputy director-general Rath Mony, the list of Cambodia’s DTA partners includes Singapore, Thailand, Brunei, Vietnam, Indonesia, Malaysia, South Korea, Turkiye, mainland China and its Hong Kong and Macau special administrative regions.

“The DTA with the Macau Special Administrative Region is set to take effect on January 1, while the agreement with Turkiye is finalising the necessary procedures for implementation,” he stated.

The agreement with Turkiye makes it the fourth G20 member to sign a DTA with Cambodia.

Mony emphasised the importance of investment laws and sub-decrees, viewing them as a favourable legal framework for fostering transparent and non-discriminatory investment. He noted their role in promoting socio-economic development within the country through the attraction of international investments.

Cambodia Chamber of Commerce (CCC) vice-president Lim Heng also emphasised the importance of the DTA for investors, especially those from countries engaging in extensive trade with the Kingdom.

“Under this agreement, investors wishing to repatriate profits will be subject to a 10 per cent tax only, compared to the standard 14 per cent. The extension of such agreements to more countries will undeniably bolster investment in the country,” Heng stated.

A DTA delineates taxation rights between signatory jurisdictions. It allows one party to limit certain aspects of the other’s tax laws and regulations, which can, in the initial stages, directly affect the country’s tax revenue due to reduced withholding tax rates applied to non-resident taxpayers and the allocation of taxation rights on specific income types to the resident country.