Cambodia and Laos Strengthen Economic Ties with New Double Taxation Agreement
The agreement aims to boost cross-border trade and investment despite modest current trade volumes between the two nations.
On December 4, Cambodia and Laos signed a double taxation agreement (DTA) aimed at enhancing trade and investment between the two countries. The agreement was signed by Cambodian Minister of Economy and Finance Aun Pornmoniroth and Lao Minister of Economy Santiphab Phomvihane, with Prime Ministers Hun Manet and Sonexay Siphandone also in attendance.
This marks Cambodia's 12th DTA, with similar agreements previously signed with countries including Singapore, China, and South Korea. The DTA aims to eliminate double taxation, making it more attractive for businesses and investors by providing tax exemptions and reducing withholding tax rates. Economist Hong Vanak from the Royal Academy of Cambodia highlighted that while the agreement may reduce government revenue in the short term, it is a crucial step toward stimulating investment and increasing trade between the two nations.
Despite modest trade levels, with Cambodia importing $185.13 million worth of goods from Laos in 2024, the DTA is expected to enhance competitiveness and provide a more transparent framework for future cross-border business. The two countries also formalized two memoranda of understanding (MoUs) to cooperate in agriculture and arts and culture. This DTA is seen as a key step in strengthening the economic relationship between Cambodia and Laos, offering greater clarity and encouraging new investment opportunities.
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This marks Cambodia's 12th DTA, with similar agreements previously signed with countries including Singapore, China, and South Korea. The DTA aims to eliminate double taxation, making it more attractive for businesses and investors by providing tax exemptions and reducing withholding tax rates. Economist Hong Vanak from the Royal Academy of Cambodia highlighted that while the agreement may reduce government revenue in the short term, it is a crucial step toward stimulating investment and increasing trade between the two nations.
Despite modest trade levels, with Cambodia importing $185.13 million worth of goods from Laos in 2024, the DTA is expected to enhance competitiveness and provide a more transparent framework for future cross-border business. The two countries also formalized two memoranda of understanding (MoUs) to cooperate in agriculture and arts and culture. This DTA is seen as a key step in strengthening the economic relationship between Cambodia and Laos, offering greater clarity and encouraging new investment opportunities.
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