Cambodia and Thailand pursuing DTA

The tax authorities of Cambodia and Thailand have agreed in principle to speed up a proposed double taxation agreement (DTA) that would protect their nationals from double taxation and encourage bilateral investment. The General Department of Taxation and Thailand’s Revenue Department have agreed to establish technical teams that would work together as early as next month to prepare a final draft agreement. Currently, Cambodia has signed DTAs with Singapore and China that aim to lower withholding tax on dividends, interest, and royalties for individuals and corporations, as well as set up mechanisms to halt tax evasion. The government is also developing frameworks for DTAs with Russia, South Korea, and Hong Kong. Hiroshi Suzuki, chief economist of Business Research Institute for Cambodia, said a Cambodia-Thai DTA could spur more interest from Japanese manufacturers pursuing the “Thailand Plus One” model that shifts segments of their Thai operations to neighboring countries. Clint O’Connell, head of tax practice for DFDL Cambodia, said a DTA alone would not necessarily be enough to entice Thai investors, adding that Cambodia should take a broader approach to review and update its current investment laws to help create more incentives for establishing special economic zones along the border. (Source: Phnom Penh Post)