By Anna Leah Gonzales
MANILA โ Finance Secretary Ralph Recto said the recently signed double taxation agreement (DTA) with Cambodia would help improve the integrity of the Philippine tax system.
โBy eliminating tax barriers and ensuring a fair and transparent framework, we are not only attracting greater foreign investments into the Philippines but also reinforcing our trade ties within the region. This will position us as a strong and reliable economic partner,โ Recto said.
The DTA was signed by Recto and Cambodia’s Deputy Prime Minister and Minister of Foreign Affairs and International Cooperation Prak Sokhonn on February 11, 2025, and witnessed by President Ferdinand R. Marcos Jr. and Cambodian Prime Minister Samdech Moha Borvor Thipadei Hun Manet.
The DTA aims to eliminate double taxation on income earned in the Philippines and Cambodia, prevent tax evasion, and enhance economic cooperation, in line with commitments under the ASEAN Forum on Taxation.
It is expected to reduce fiscal barriers, stimulate bilateral trade and investments, and contribute to stronger economic ties between the two nations. The accord 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.
The DTA also includes the exchange of tax information and dispute resolution mechanisms in line with the Anti-Base Erosion and Profit Shifting and tax transparency initiatives and standards. It was finalized following three rounds of negotiations between the two countries.
The third and final round was completed in Manila in April 2024. The signed DTA is set to take effect following ratification by the respective legislative bodies in the Philippines and Cambodia.
The signing of the DTA was held as part of Prime Minister Hun Manetโs two-day official visit to the Philippines on February 10 to 11, 2025 to strengthen both nationsโ relations and advance collaborations in key sectors as well as regional and multilateral cooperation.
Recto served as Marcos’ Cabinet-Secretary-in-Attendance during the official visit. Marcos earlier cited the importance of the DTA.
โWe welcome our formal cooperation on the avoidance of double taxation and the exchange of best practices in competition law that the Philippines and Cambodia both consider as critical to entice and facilitate greater bilateral investments and economic activities between our business sectors,” Marcos said during the signing. (PNA)
