Cambodia and Indonesia have reached an agreement on double tax avoidance (DTA), the General Department of Taxation (GDT) said on Tuesday.
If the remaining approval procedures are completed in the course of 2020, the DTA could take effect from as early as January 1, said the GDT.
It said the agreement will protect nationals of either country from double taxation and expressed its hopes that it will boost bilateral investment.
As obliged by Article 29 of the DTA, the Indonesian government recently notified the Cambodian government that it had completed the internal procedures that are required for the entry into force, it added.
An official from the GDT’s Department of Legislation, Fiscal Policy and International Tax Cooperation, who declined to be named, told The Post that the DTA will further shore up bilateral trade.
“The agreement will facilitate investment between the two countries and will help boost Indonesian investment into Cambodia,” he said.
Cambodia Chamber of Commerce vice-president Lim Heng said the DTA was designed to prevent investors from dual taxation and will allow income tax to be paid wherever individuals or companies make a profit.
He said excessive payments in the taxpayer’s home country will be trimmed in the form of exemptions or credits.
“The agreement will benefit Indonesian operators by not having them pay double tax on profits and will also prop up bilateral trade between the two countries,” Heng said.
Bilateral trade volume between Cambodia and Indonesia peaked at more than $792 million last year, up 45.75 per cent from $543 million in 2018, data from the Ministry of Commerce show.
The Kingdom exported about $22.32 million worth of products to the Indonesian market last year, up 3.96 per cent from 2018, and imported $770 million, up 47.46 per cent.