Cambodia and Singapore have recently signed the Second Protocol Amending the Bilateral Double Taxation Agreement (DTA), to bring the agreement in line with the latest international standards.
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The agreement, signed by Dr Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance, and Ms Teo Lay Cheng, Ambassador of the Republic of Singapore to Cambodia, seeks to prevent the erosion of tax bases and the shifting of profits, also known as Base Erosion and Profit Shifting (BEPS).
The agreement will provide a more secure and predictable tax environment for businesses and investors in both countries. Casinos still not on agenda.
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The original “Cambodia-Singapore DTA Agreement” was signed on April 20, 2016, and came into effect on January 1, 2018. However, to adapt to the changing global tax landscape and to tackle tax evasion more effectively, the two countries have agreed to amend the agreement by the recommendations of the Organisation for Economic Co-operation and Development (OECD).
The purpose of the Second Protocol is to make the Cambodia-Singapore DTA consistent with the latest international standards, especially those outlined by the OECD, to address BEPS.
These standards prevent multinational companies from minimizing tax liabilities through profit shifting and other aggressive tax planning strategies. By updating the DTA, Cambodia, and Singapore are taking proactive steps to combat tax evasion. The agreement will provide a more secure and predictable tax environment for businesses and investors in both countries. Casinos still not in agenda.
It will also ensure that profits are taxed appropriately, avoiding double taxation and fostering economic cooperation between the two nations.
The amended agreement will introduce various provisions to prevent tax avoidance and evasion. This includes strengthening the rules for determining the residence of entities ensuring that only bona fide residents can receive treaty benefits. It will also include provisions to combat treaty abuse and prevent the use of shell companies for illicit purposes.
Furthermore, the updated DTA will enhance the exchange of information between the tax authorities of Cambodia and Singapore. This will enable both countries to share relevant tax information more efficiently, allowing for better enforcement and compliance measures.
