Cambodia and Thailand have stepped up trans-border investment to underpin economic activity between them, as both countries roll back entry restrictions following improvements in Covid-19 metrics, and while benefiting from provisions of a bilateral double tax avoidance agreement (DTA).
The foreign and finance ministries, in collaboration with the former’s Thai counterpart, organised a seminar on June 13 on how to leverage the DTA to spur cross-border investment between Cambodia and Thailand, attended by representatives of both countries’ tax authorities and private sectors.
The event sought to inform private sector actors about the process of applying for DTA benefits, and gather opinions and proposals from stakeholders on this and other double taxation matters.
Cambodian ambassador to Thailand Ouk Sorphorn, who attended the event, noted that the DTA came into force in 2018, with the aim of increasing trade benefits and reducing investment barriers.
Implementation of the DTA has gone well overall, he told The Post on June 13, saying that Cambodia was keen to cooperate with Thailand to ensure the smooth operation of the agreement and associated activities, as well as learn more from its neighbour’s ample experience in the area, drawn from its work involving “more than 60” similar treaties with other countries.
In spite of that, a lack of understanding amongst investors, especially new players, is one of the main obstacles to profiting from the DTA, he said, adding that the seminar highlighted a number of challenges and essential relevant information.
Thai foreign ministry director-general for East Asian Affairs Arjaree Sriratanaban, who also took part in the event, noted that Thai investors are investing “heavily” in the Cambodian logistics and financial sectors, a trend she said reflects the closer economic ties between the two countries.
She called on all public and private stakeholders of both countries to work together more closely to facilitate bilateral trade and investment, and hence drive increases in investment value.
These concerted efforts will support post-Covid-19 economic recovery in both countries and reinforce bilateral economic ties to better cope with world economic changes and challenges brought on by the current international environment, she said.
Arjaree voiced hope that the information, advice and guidance provided by tax authorities and private sector actors at the event would lead to improvements in the use of the DTA benefits and refinements in the process to apply for and obtain them, making procedures more convenient and smooth.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng, who did not attend the event, commented that DTAs are crucial for investors, especially with Cambodia’s major trading partners.
Heng affirmed that mutual investment between Cambodia and Thailand had risen in tandem with the easing of Covid-era entry restrictions, and described DTAs as magnets for investment.
As an example, he said that with the treaty in effect, investors wanting to send profits back to their country of origin must pay just 10 per cent in taxes and other charges, as opposed to 14 per cent otherwise.