Manila: Finance Secretary Ralph Recto announced that the recently signed double taxation agreement (DTA) with Cambodia is poised to enhance the integrity of the Philippine tax system. 'By 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,' Recto stated.
According to Philippines News Agency, 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. The signing ceremony was attended by President Ferdinand R. Marcos Jr. and Prime Minister Samdech Moha Borvor Thipadei Hun Manet. The agreement is designed to eliminate double taxation on income earned in both countries, prevent tax evasion, and enhance economic cooperation, aligning with the commitments under the ASEAN Forum on Taxation.
The DTA is anticipated to reduce fiscal barriers and stimulate bilateral trade and investment, strengthening economic ties between the Philippines and Cambodia. It addresses various taxation aspects, including income from business profits, dividends, interests, royalties, capital gains, and other revenue sources, ensuring a fair and efficient tax framework for businesses and individuals operating in both jurisdictions.
Additionally, the agreement includes provisions for 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. The agreement was the result of three rounds of negotiations, with the final round completed in Manila in April 2024, and is set to take effect following ratification by the respective legislative bodies in both countries.
The signing of the DTA was a key element of Prime Minister Hun Manet's two-day official visit to the Philippines on February 10 to 11, 2025, aimed at strengthening bilateral relations and advancing collaborations in key sectors, as well as regional and multilateral cooperation. During the visit, Recto served as Marcos' Cabinet-Secretary-in-Attendance. President Marcos highlighted the importance of the DTA, emphasizing its role in enticing and facilitating greater bilateral investments and economic activities between the business sectors of both nations.
