Cambodia and the Philippines have recently concluded a Double Taxation Agreement ("DTA") which aims to ease the burden of double taxation on individuals and entities operating in these two countries. This, in turn, removes trade and investment barriers and encourages cross-border economic activities.
The final draft of the DTA covers the taxation of income earned by citizens and residents of both Cambodia and the Philippines. It will also describe how each country’s tax administration will be carried out and how credit taxes are paid in accordance with the tax rules in both countries.
Negotiations on the DTA began in 2018, with a subsequent meeting held in 2019. Cambodia and the Philippines are expected to sign the DTA in October 2024.
The successful negotiation of the DTA strengthens the economic tie between the contracting states. It demonstrates a commitment to bilateral cooperation and understanding and future collaborations in various sectors, such as education, tourism, and technology.
On 3 May 2024, the Ministry of Commerce issued Decision No. 107 on Conditions and Procedures for the Grant of Leniency under Law on Competition ("Decision"). The Decision applies to those who directly or indirectly violate the horizontal agreement restriction under Article 7 of the Law on Competition.
The Decision provides for the conditions and procedures for a grant of leniency, which include: (i) an exemption from penalty and punishment; (ii) a reduction of penalty and punishment; (iii) an exemption from penalty and punishment for former and current employees who work for a person entitled to such exemption ("Employees"); and (iv) empowering the Competition Commission of Cambodia ("CCC") to reduce the penalty and punishment for Employees at its discretion.
CCC will consider certain conditions before granting leniency, including whether: (i) the request for exemption is made before CCC issues a decision on preliminary inspection and sends the case to the court; (ii) the applicant submits a request with supporting documents and information as evidence related to the violation of the horizontal agreement restriction; and (iii) the applicant continues to cooperate with CCC until CCC issues decisions on preliminary inspection and sends the case to the court.
On 3 May 2024, the Ministry of Commerce issued Notification No. 1538 on Incentives for Voluntary Business Registration for Information and Broadcasting Sector ("Notification") to set out certain exemptions for businesses in the sector. Under the Notification, any person who intends to register a business in the information and broadcasting sector is: (i) entitled to a three-year exemption from payment of public service fees for business registration; and (ii) exempted from penalties which could be imposed on businesses operating without due registration.
The Ministry of Commerce has issued Prakas No. 095 on the Unfair Practices in Business in relation to Commercial Advertisements and Sale Promotions dated 12 April 2024 ("Prakas"). The Prakas aims to set out some unfair practices in business that are not stipulated in the Law on Consumer Protection. It also applies to any businessperson supplying and advertising goods and services through promises, advertisements, or false or misleading representation in any type and form, and any means in Cambodia.
The Prakas also sets out certain requirements that any person supplying goods and services must comply with when it conducts any sales, stock clearance, bundle sales, membership or saving card discounts, or lucky draws. Some prohibited activities of unfair practice in relation to prize giveaways, advertisements, sale promotions, and advertisements with a false description or other prohibited activities are also stipulated in the Prakas.
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On 8 April 2024, the General Department of Taxation ("GDT") issued Guideline No. 13804 on Minimum Tax Exemption for Qualified Investment Projects ("QIP") Entities ("Guideline"), which provides guidance on the procedure for QIP entities to be exempt from the minimum tax. Pursuant to the Guidelines, QIP entities are still required to provide GDT with their independent external auditor reports on financial statements and to maintain account books properly. However, for newly registered QIP entities, there is an exemption from the submission of the independent external auditor report for their first year; for the following years, they will be required to submit such report for each relevant year latest by the end of June.
