Cambodia and the Philippines have successfully concluded nearly five years of negotiations on a double taxation avoidance agreement (DTAA). This agreement aims to reduce the burden of double taxation on businesses and individuals in both countries. Negotiations began in 2018 in Manila and continued in Siem Reap in 2019. The signing of the DTAA is scheduled for October 2024.

Beyond economic benefits, the DTAA signifies strengthened political relations between Cambodia and the Philippines, demonstrating a commitment to cooperation and understanding. The agreement sets a precedent for future collaborations in various sectors such as education, tourism, and technology.

While specific details are not yet available, the DTAA is expected to follow common principles seen in other agreements, including provisions on income taxation, tax dispute resolution mechanisms, and information exchange to prevent tax evasion. These measures will create a stable and predictable tax environment, encouraging cross-border economic activities.

Micro, small, and medium enterprises (MSMEs), which form the backbone of both economies, will particularly benefit. In the Philippines, MSMEs make up 99.5 percent of businesses, providing 63 percent of employment and contributing to 40 percent of GDP. In Cambodia, MSMEs comprise 99 percent of businesses, contributing to 58 percent of GDP and providing 70 percent of employment. The DTAA will simplify the tax regime for these enterprises, reducing administrative burdens and costs.