Manila: The tax treaty between the Philippines and Cambodia would benefit Filipino companies and workers operating in the Southeast Asian nation by preventing double taxation on their income, a Department of Finance (DOF) official said Thursday. During a Senate Committee on Foreign Relations hearing, DOF Assistant Secretary Euvimil Nina Asuncion said the Double Taxation Avoidance Agreement (DTAA) would allow Filipinos and Philippine firms in Cambodia to avail of treaty benefits and avoid being taxed fully under Cambodian rules.

According to Philippines News Agency, Asuncion told the panel chaired by Sen. Erwin Tulfo that Philippine companies operating in Cambodia are currently subject to the regular taxation imposed by the Cambodian government. She emphasized that the DTAA would enable these firms to enjoy tax relief provisions similar to those available in countries with existing tax agreements with the Philippines.

'We need to protect our Philippine companies that are operating there and Filipinos who are working in Cambodia so we have the DTAA to do that,' Asuncion said. She further explained that the agreement could significantly reduce the tax burden on certain Filipino workers providing services in Cambodia. Instead of facing a tax rate of up to 20 percent, these workers may only be taxed up to 10 percent by Cambodia under the treaty.

Asuncion highlighted that there are approximately 4,000 Filipinos working in Cambodia and at least 13 Filipino companies operating there. However, Sen. Tulfo stressed the importance of clearly establishing the benefits of the treaty before the Senate concurs with it. He urged economic managers to present more data and justification for the proposed tax pact, as lawmakers need to explain the expected gains to the public.

The treaty, signed by the Philippines and Cambodia in February 2025, aims to eliminate double taxation on income, prevent tax evasion, and encourage greater trade and investment between the two countries. Under the Philippine Constitution, international agreements such as tax treaties require concurrence by the Senate before they can take effect.