Who Benefits from Cambodia's Double Taxation Agreements ?

Whether you're a working stiff or a business owner yourself, this is the place to discuss all aspects of financing your drinking habit ;-)

NO BUSINESS SALES HERE PLEASE, WE HAVE A SECTION FOR THAT IN THE CLASSIFIEDS.
User avatar
CEOCambodiaNews
Expatriate
Posts: 62322
Joined: Sun Oct 12, 2014 5:13 am
Reputation: 4033
Location: CEO Newsroom in Phnom Penh, Cambodia
Contact:
Cambodia

Who Benefits from Cambodia's Double Taxation Agreements ?

Post by CEOCambodiaNews »

Dud stock trade by senator’s daughter exposes Cambodian tax loophole
September 21, 2022
By Jack Adamović Davies for RFA
[excerpts]
A Cambodian senator’s daughter gambled U.S. $8 million on the purchase of shares in an American medical technology company through a Singaporean broker – a transaction conveniently completed before the adoption of a double taxation treaty between Cambodia and Singapore – regulatory filings reviewed by RFA show.

Had the investment worked out as planned, Lau Sok Huy expected returns in the realm of $50-60 million, and could have avoided up to $12 million in Cambodian taxes.

But the investment flopped. Seven years after she became the second-largest shareholder in Tomi Environmental Solutions Inc, Sok Huy is down some $6.3 million and furious, according to the company’s founder and a fellow shareholder familiar with the deal who spoke with RFA.

The investment – equivalent to more than 3,000 years of the average Cambodian salary – is one Sok Huy will likely have to write off as a loss. Tomi’s share price has dipped so low that it currently risks losing its listing on the Nasdaq Capital Market.

But the structure and sequencing of the deal sheds a light on how well-to-do Cambodians stand to benefit from the double taxation agreement. Such agreements are viewed by advocates as a boon to trade and investment between nations, but they can also offer a way for wealthy investors to avoid taxes.

Regulatory disclosures filed during Sok Huy’s acquisition of the Tomi shares strongly suggest the deal – in which she loaned the money to her broker who had purchased the shares, and then took the shares as repayment for the loan – was tailored to benefit from the double taxation agreement. The loan behind the deal was signed in January 2016, but was amended in May of the same year, just three days after the tax treaty was signed.

Sok Huy’s politically connected background raises questions about whether it was appropriate for her to benefit from the agreement. Her father, Lau Ming Kan, is a longtime senator for the ruling Cambodian People’s Party, which has governed the country in one form or another for three decades. One of the final steps in any treaty becoming law in Cambodia – including the double-taxation agreement with Singapore – is ratification by the Senate where he sits.

The DTA
Double-taxation agreements, often referred to by the acronym DTAs, are designed to ensure that companies or individuals do not get taxed on the same profits twice when doing business overseas. When two countries sign a DTA, the hope is that it will promote trade and investment between both nations.

This particular treaty appears to have paid off. By the end of last year, Singapore was Cambodia’s second-largest source of foreign investment, having barely figured in the rankings half a decade earlier.

A business consultant with more than a decade’s experience in Phnom Penh told RFA they viewed the agreement as a net positive for Cambodia. “Can the wealthy take advantage of them to reduce their tax bill as well? Absolutely,” the consultant added. “But they already have other means of doing so. So, of all the 'sins' here [in Cambodia], I wouldn't see that as being a meaningful one.”

That’s not an analysis everyone would agree with. In late 2016, the World Bank published a blog by two of its senior employees – Jim Brumby and Michael Keen – that asked whether tax treaties like DTAs are a “boost or bane for development” in lower-income countries, such as Cambodia. They were not convinced.
Full article: https://www.radiofree.org/2022/09/21/du ... -loophole/
Join the Cambodia Expats Online Telegram Channel: https://t.me/CambodiaExpatsOnline

Cambodia Expats Online: Bringing you breaking news from Cambodia before you read it anywhere else!

Have a story or an anonymous news tip for CEO? Need advertising? CONTACT US

Cambodia Expats Online is the most popular community in the country. JOIN TODAY

Follow CEO on social media:

Facebook
Twitter
YouTube
Instagram
User avatar
CEOCambodiaNews
Expatriate
Posts: 62322
Joined: Sun Oct 12, 2014 5:13 am
Reputation: 4033
Location: CEO Newsroom in Phnom Penh, Cambodia
Contact:
Cambodia

Re: Who Benefits from Cambodia's Double Taxation Agreements ?

Post by CEOCambodiaNews »

PM HE Suggests Cambodia-Laos Agreement on Double Taxation to Boost Investment
AKP Phnom Penh, May 04, 2023 --

Cambodian Prime Minister Samdech Akka Moha Sena Padei Techo HE has asked Laos to consider having an agreement on double taxation with Cambodia to boost the investment activities between the two neighbouring nations.

The Cambodian Premier made the request during a bilateral summit meeting with visiting H.E. Dr. Thongloun Sisoulith, President of the Lao People’s Democratic Republic, at the Peace Palace here this morning, according to H.E. Eang Sophalleth, Personal Assistant to Samdech Techo HE.

The Cambodian Prime Minister also thanked H.E. Dr. Thongloun Sisoulith for accepting the invitation to attend the Opening Ceremony of the 32nd SEA Games hosted by Cambodia, and agreed with the Lao President’s insight over the bilateral relations between both countries.
- AKP
Join the Cambodia Expats Online Telegram Channel: https://t.me/CambodiaExpatsOnline

Cambodia Expats Online: Bringing you breaking news from Cambodia before you read it anywhere else!

Have a story or an anonymous news tip for CEO? Need advertising? CONTACT US

Cambodia Expats Online is the most popular community in the country. JOIN TODAY

Follow CEO on social media:

Facebook
Twitter
YouTube
Instagram
Post Reply Previous topicNext topic
  • Similar Topics
    Replies
    Views
    Last post

Who is online

Users browsing this forum: No registered users and 97 guests