ASEAN Regulatory Brief: Cambodia Tax Regulations, Laos Foreign Currency Loans, and Philippines-Cambodia Bilateral Relations
Cambodia: New Tax Regulations for Multi-activity Businesses
The Ministry of Economy and Finance (MEF) in October introduced notification Prakas 1127 detailing updated requirements for companies carrying multiple business activities including one or more Qualified Investment Projects (QIP). A QIPs is an investment project that has been issued a Final Registration Certificate (FRC). In order to qualify as a QIP, the investor has to register the project with the Council for the Development of Cambodia (CDC) or Provincial Municipals Investment Sub-Committee (PMIS) to receive the FRC. Businesses that will be affected include those that have more than one QIP, those that carry out more than one business activity subject to different rates of tax on profit and companies that are involved in QIP and non-QIP business activities.
This notification also applies to businesses carrying out the aforementioned activities that were incorporated before October 11. Such businesses will have to register their business activities separately with the General Department of Taxation (GDT) within 15 days of starting the activity and get a separate Value Added Tax (VAT) and Tax Identification Number (TIN). These business will also have to submit monthly and annual tax returns for the registered business activity.
Laos: Foreign Currency Lending Restrictions Eased
Laos’ central bank, the Bank of the Lao PDR issued a new regulation allowing commercial banks to lend foreign currency to importers including those that have no income in foreign currency. The move is aimed to relax borrowing restrictions, which earlier allowed only those with foreign currency to borrow in foreign currency. The lending of foreign currency will be allowed to importers who require funds for importing machinery, vehicles, equipment and other development related assets. Importers of medicine, medical equipment, gas (petrol), and natural gas can also apply for foreign currency loans.
Philippines, Cambodia Boost Bilateral Ties
Following Philippines’ President Rodrigo Duterte’s visit to Phnom Penh (Cambodia) on December 14, both countries signed four bilateral cooperation agreements. The agreements include a Memorandum of Understanding (MoU) on anti-transnational crime, a five-year tourism cooperation agreement and MoUs on labor protection and sports cooperation.
In addition, Philippines and Cambodia agreed to enhance cooperation on agriculture, tourism, business and trade as well as terrorism and drugs. Both countries are also looking to further protect migrant workers from both countries which includes assisting Cambodia on vocational training of its workforce. Air accessibility and route development will also be given priority; direct flights between Manila (Philippines) and Siam Reap (Cambodia) to increase tourism is currently being discussed by officials.
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