PHNOM PENH: The Council of Ministers of Cambodia has approved a draft law approving the elimination of double taxation related to income tax and the prevention of tax evasion and tax avoidance with Turkey and the Macau Special Administrative Region of China.

Government Spokesperson, Phay Siphan, confirmed that there are many benefits that can be gained from the agreements between Cambodia and the Macau Special Administrative Region of the People's Republic of China and the Republic of Turkey, such as attracting and facilitating investment and trade with international business as well as preventing and suppressing tax evasion in both national and international frameworks.

The agreement on the avoidance of double taxation is the division of taxation rights between the parties to the jurisdiction of the signatory, which may limit some of the implementation of local laws and regulations on taxation. The process of initial implementation may have a direct impact on the tax revenue of the country of origin due to the reduction of the withholding tax rate applicable to non-resident taxpayers and the allocation of taxation rights on certain types of income to the country of residence.

However, this agreement provides many compensatory benefits, such as attracting and promoting international investment and trade due to the provision of clarity, transparency and non-discrimination in the tax sector, increasing the tax base and capital outflow due to the attractiveness of the tax rate and interest, receiving the transfer of technology and expertise from abroad, and strengthening international cooperation in the field of taxation, especially the prevention and suppression of tax evasion through the exchange of taxpayer information.

^{PHOTO: KOK KY}