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.

“The Philippine companies that are operating there are subject to the regular taxation that is imposed by the government of Cambodia. So, full taxation po sila (So they are fully taxed),” Asuncion told the panel chaired by Sen. Erwin Tulfo.

She said the treaty would allow Philippine firms to benefit from tax relief provisions similar to those enjoyed by companies operating 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.

Asuncion said the agreement could also reduce the tax burden on certain Filipino workers providing services in Cambodia.

“Instead na mata-tax sila ng Cambodia up to 20 percent, hanggang 10 percent na lang sila pwedeng i-tax ng Cambodia (Instead of being taxed by Cambodia up to 20 percent, they may only be taxed up to 10 percent),” she explained.

She added that the Philippines currently has around 4,000 Filipinos working in Cambodia and at least 13 Filipino companies operating there.

Tulfo, however, said the Senate must clearly establish the benefits of the treaty before concurring with it, noting that lawmakers will need to explain to the public the expected gains from the agreement.

“I want to find out what we get out of this,” Tulfo said, as he asked economic managers to provide more data and justification for the proposed tax pact.

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. (PNA)