Cambodia: Income tax treaty with Singapore; Cambodia’s first tax treaty

Cambodia: Income tax treaty with Singapore

Representatives of the governments of Cambodia and Singapore on 20 May 2016 signed an agreement for the avoidance of double taxation. This is the first income tax treaty signed by Cambodia.

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The treaty is pending ratification by Cambodia and Singapore.

Overview of treaty provisions

The income tax treaty between Cambodia and Singapore includes withholding tax rates for payments of dividends (a treaty rate of 10%), interest (0% or 10%), royalties (10%), and fees for technical services (10%). The treaty is silent as to the treatment of branch profits taxation.

The Cambodia-Singapore income tax treaty includes rules for determining a permanent establishment, when an entity:

  • Has a building, construction, assembly, or installation project or provides supervisory activities in connection with such a project when the activities are for a six-month period
  • Furnishes services through employees or other personnel engaged by the enterprise for a period aggregating more than 183 days in any 12-month period
  • Conducts activities for the exploration or exploitation of natural resources for a period(s) aggregating more than 90 days in any 12-month period

It is implied that entities that do not satisfy these requirements will not have a PE in Cambodia.

The treaty clarifies that income from immovable property in Cambodia will be taxed in Cambodia (and vice versa for property in Singapore). There are other provisions in the treaty concerning the tax treatment of international transport, capital gains, independent personal services, dependent personal services, methods for the elimination of double taxation, and rules for the exchange of tax information. 

 

Read a June 2016 report [PDF 87 KB] prepared by the KPMG member firm in Cambodia: Singapore / Cambodia Agreement for the Avoidance of Double Taxation

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