10 July 2019
CAMBODIA: Hong Kong Signs Comprehensive Double Taxation Agreement with Cambodia
Hong Kong has signed a comprehensive avoidance of Double Taxation Agreement (DTA) with Cambodia. Under the terms of the deal signed on 26 June, any tax paid in Cambodia by Hong Kong businesses will be deemed as a credit against the tax payable in Hong Kong on the same income. Likewise, any tax paid by Cambodian companies in Hong Kong will be allowed to be deducted from the tax payable in Cambodia on the same income.
Secretary for Financial Services and the Treasury James H. Lau Jr, who signed the DTA on Hong Kong’s behalf, highlighted the importance of the DTA by pointing out that Cambodia was Hong Kong’s 38th largest trading partner last year. According to the online news platform of the Government of the Hong Kong Special Administrative Region, Lau said: “We have all along treasured our economic and trade ties with Cambodia and I have every confidence that this agreement will encourage more bilateral investments and bring our co-operation to a new level.”
Among its other provisions, the DTA sets out the official allocation of tax rights between Hong Kong and Cambodia. The Hong Kong government hopes that this will help Hong Kong investors and businesses assess more accurately any tax liabilities which may arise from any trading and economic activity in Cambodia and/or with Cambodian business entities. The DTA also contains a number of tax relief measures available to both sides, and incorporates an article on exchange of information between the tax authorities of the two jurisdictions. The full text of the DTA can be accessed here.