Philippines, Cambodia set to sign double taxation deal in 2025

MANILA, Philippines — The governments of the Philippines and Cambodia are set to sign a bilateral agreement early next year aimed at preventing double taxation that would allow Filipino businesses to become more competitive abroad, the Department of Finance said.

The DOF said the signing of the double taxation agreement (DTA) between the two governments is expected in February next year when Cambodian officials are scheduled to visit the Philippines.

It was Cambodia that requested to move the signing of the DTA to next year from earlier announced schedule of within the year to coincide with their official state visit, DOF officials said.

The DOF emphasized that DTAs support local businesses in their international ventures as their taxing rights are protected, thus jncreasing trade and investment across economic borders.

“These agreements protect our tax rights while facilitating cross-border trade and investment. Expanding our DTA network, particularly within ASEAN, allows Filipino businesses to diversify their markets with fewer tax burdens, boosting their competitiveness abroad,” Finance Undersecretary Charlito Martin Mendoza said.

The Philippines and Cambodia concluded its negotiations on the DTA earlier this year, marking a significant milestone in strengthening economic ties between the two Southeast Asian states.

Under the terms of the DTA, both countries agree to mitigate the burden of double taxation on individuals and businesses operating across borders, which may contribute to the elimination of barriers to trade and investment and encouragement of cross-border economic activities.

The DTA encompasses taxation of income earned by citizens and residents of the Philippines and Cambodia.

It also outlines how each country’s tax administration shall impose and credit taxes paid in accordance with the tax rules in both countries.

Negotiations on the DTA began in 2018 in Manila and was followed through in 2019 in Siem Reap.

The DOF said the government is negotiating with Lao PDR for a DTA. The agency also said it is planning to renegotiate the existing DTAs with Indonesia, Malaysia and Singapore.

The DOF is strengthening transparency and compliance through partnerships like the Mutual Administrative Assistance in Tax Matters and the Automatic Exchange of Information to safeguard tax revenues and help create a fair, rule-based system for businesses operating across borders.