MANILA – Finance Secretary Ralph Recto highlighted on Thursday (13 Feb 2025) the potential of the newly signed Double Taxation Agreement (DTA) with Cambodia in improving the integrity of the Philippine tax system.

Signed on February 11, 2025, the agreement aims to remove tax barriers, attract foreign investment, and strengthen regional trade relations.

In a statement, Recto noted, “By eliminating tax barriers and creating a transparent framework, this agreement not only boosts foreign investments but also reinforces our trade ties, positioning us as a strong and reliable economic partner.”

The DTA, signed by Recto and Cambodia’s Deputy Prime Minister Prak Sokhonn, focuses on eliminating double taxation on income earned in both countries, preventing tax evasion, and improving economic cooperation in line with ASEAN tax commitments.

The agreement covers various types of income, such as business profits, dividends, royalties, and capital gains, providing a fair tax structure for individuals and businesses in both countries. Additionally, it includes tax information exchange and dispute resolution mechanisms aligned with international standards on tax transparency and anti-tax avoidance.

The DTA follows three rounds of negotiations between the two countries, with the final round held in Manila in April 2024. It will take effect after ratification by the legislative bodies of both the Philippines and Cambodia.

This deal was part of Cambodian Prime Minister Hun Manet’s official visit to the Philippines, which took place from February 10 to 11, 2025, aimed at strengthening bilateral ties and advancing cooperation in various sectors.

President Ferdinand R. Marcos Jr. emphasized the importance of the agreement, stating, “We welcome formal cooperation on the avoidance of double taxation, which is critical for fostering greater investments and economic activities between our countries.”

The DTA is expected to enhance bilateral trade, support tax compliance, and pave the way for a more robust economic partnership between the Philippines and Cambodia.

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