A Vietnamese trade official in Cambodia last Saturday said a recent tax agreement between the countries will build more confidence among investors and business people in the Asean neighbours.
Cambodia and Vietnam reached an agreement on the avoidance of double taxation (ADT) and the prevention of fiscal evasion with respect to taxes on income at a sidelines meeting of the Greater Mekong Sub-region on Saturday in Hanoi.
It was witnessed by the prime ministers of both countries and is the fifth ADT that Cambodia has signed.
Tran Lam Tung, Vietnamese Embassy trade attache in Phnom Penh, said the double taxation treaty encouraged international trade and investment along with the free flow of technology.
It laid down the laws and parameters of how taxation was supposed to work. There was also increased transparency.
“The agreement clearly shows the position of a taxpayer with foreign income or one whose source of income is in another country with respect to domestic taxpayers,” he said.
“As you know, nowadays, more and more transactions among companies of the two countries have taken place in bilateral trade and commerce as residents of one country conduct business activities in any other country they choose.
“The tax double avoidance agreement helps to make it easier for capital and people to move from one country to another without any added burden.
“It also makes investing in one of the two countries a fairly simple and positive business decision, something that would have been fraught with risks had the agreement not existed,” he said.