Cambodia and France have embarked on negotiations for a Double Taxation Agreement (DTA) aimed at boosting business and investment flows between the two nations. The first round of talks was chaired by Bun Neary, deputy director-general of the General Department of Taxation (GDT), and led by Florian De Filippo, head of the International Trade Rules Division at the French finance ministry on December 7. The initiation of these discussions marks a significant milestone in tax cooperation and investment promotion.
The fruitful meeting between the Cambodian and French delegations was a result of coordinated efforts by the French embassy in Phnom Penh following a visit by the delegation to the GDT in April 2022. Neary emphasized the importance of these deliberations in facilitating DTA discussions and expressed confidence in the potential of the Cambodia-France DTA to strengthen bilateral tax cooperation and stimulate investment between the two nations.
Both parties have displayed a commitment to expediting the negotiations, with a mutual agreement to engage in detailed conversations on all aspects of the draft agreement. Lim Heng, vice-president of the Cambodia Chamber of Commerce (CCC), emphasized the significance of DTAs, particularly for investors from major trading partners. Under the agreement, investors can enjoy reduced income tax rates of 10% compared to the regular rate of 14%. Expanding the reach of such agreements to more countries will encourage investment through increased signatories.
Cambodia has already established DTAs with 11 countries and territories, with nine currently in effect. These include Singapore, Thailand, Brunei, Vietnam, Indonesia, Malaysia, South Korea, Turkey, mainland China, and its special administrative regions of Hong Kong and Macau. The DTAs with Turkey and Macau are scheduled to be operational in January 2024.
The France-Cambodia Chamber of Commerce and Industry (CCIFC) reports that its membership includes 150 French companies, and recent surveys indicate the presence of over 500 French businesses operating in the Kingdom. In 2022, the trade volume between Cambodia and France reached $542.37 million, representing a notable 25.92% increase from the previous year. Cambodian exports constituted 78.02% of this activity, amounting to $423.13 million, while imports from France totaled $119.24 million, showcasing respective year-on-year growths of 27.89% and 19.41%. The trade surplus for Cambodia expanded by 31.55% from $231 million in 2021 to $303.89 million in 2022, as stated by the General Department of Customs and Excise (GDCE).
The ongoing negotiations for a DTA between Cambodia and France reflect the commitment of both nations to fostering stronger economic ties and promoting investment opportunities. By providing a conducive environment for international business partnerships, this agreement has the potential to unlock new avenues of growth, strengthen bilateral trade relations, and contribute to the overall economic development of both countries.
Source: Phnom Penh Post
