Update Type: Tax Updates

October 21, 2021

Part One of our articles focusing on intra-group services in Cambodia highlighted the importance of Cambodian taxpayers being able to fundamentally prove that intragroup services were actually rendered by its related party and that these services justified a charge being made by its related party. Highlights of this note Risk created by Head Office approach […]

September 20, 2021

For many developing countries, one of the most common types of related party transactions is intra group services. This could be domestic, but is predominantly cross border services provided by Regional or Ultimate Headquarter/Group Service Centers. This Article discusses why so many Cambodian taxpayers are exposing themselves to a high level of transfer pricing audit […]

July 29, 2021

The Royal Government of Cambodia (“RGC”) has taken a number of actions to promote foreign investment in Cambodia, notably among them is amending the Law on Investment (“LOI”). The amended LOI has gone through several drafts and is now under review by the National Assembly and the Senate – the last step before it can […]

May 20, 2021

Highlights of this note Some pitfalls in registering an offshore sale of shares in a Cambodian company Frequent disputes on the 0.1% stamp duty for share transfers in Cambodia Uncertainties about future capital gains tax on the transfer of shares in a Cambodian company Registering a sale and purchase of shares in a Myanmar company […]

April 17, 2021

The Cambodian tax authority, the General Department of Taxation (“GDT”), has instituted an extension for all monthly tax returns normally due on 25 April.  These are the Prepayment of Profit Tax, the Value Added Tax, the Tax on Salary and the Withholding Tax. The extension comes amid city wide lock downs of Phnom Penh and […]

April 15, 2021

In accordance with the recent Government directed business closures and stay-at-home orders, we would like to inform you as follows: VDB Loi in Phnom Penh will continue to operate, with the help of our cloud technology, through online processes and work-from-home.  Tax filings and government filings will continue insofar these are possible by distance/online. Tax […]

January 26, 2021

On 29 January 2020, the Ministry of Economy and Finance issued Prakas No. 098 MEF.PrK on Tax on Income (“Prakas 098”), which made several changes to the previous Tax on Income (“TOI”) Prakas No. 1059 MEF.PrK.TD that will affect the preparation of TOI returns from the year 2020 onwards. We highlight below some of the […]

September 22, 2020

Introduction   The banking system in Cambodia includes commercial banks, specialized banks, microfinance institutions (“MFIs”), rural credit institutions, financial leasing companies, third-party processors, credit bureaus, representative offices, payment service providers, and money changers. Of these entities, commercial banks play a crucial role in providing financial services to the general public and businesses, ensuring economic and social stability, and the sustainable growth of the economy. As of this writing, there are 51 licensed commercial banks in Cambodia; […]

August 31, 2020

Capital Gains Tax (“CGT”) has finally been introduced in Cambodia by Prakas no. 356 MEF.Prk dated 1 April 2020, issued by the Ministry of Economy and Finance (“MOEF”). As per the Prakas, taxpayers both resident and non-resident are subject to CGT at the rate of 20% on their gains from the sale or transfer of […]

June 16, 2020

On 5 May 2020, the General Department of Taxation (“GDT”) issued a guideline on the value added tax (“VAT”) treatment of business asset disposals. The guideline specifies the following three points with regard to VAT on business asset disposals: Where the input VAT on a business asset was allowed as a tax credit, the subsequent […]

May 29, 2020

Due to the ongoing COVID-19 situation, on 26 May 2020, the Royal Government of Cambodia (“RGC”) issued a press release on the fourth round of stimulus measures in response to the COVID-19 pandemic, which are aimed at rebuilding and promoting economic growth after the COVID-19 crisis. The newly announced package extends tax relief previously set […]

April 14, 2020

In the wake of the Royal Government of Cambodia (“RGC”)’s stimulus package in response to the COVID-19 pandemic, the General Department of Taxation (“GDT”) has introduced further tax concessions for affected businesses. On 9 April 2020, the GDT issued Notification 9648 GDT (“Notification 9648”) on Additional Tax Concessionary Measures to Support Severely Affected Sectors as a […]

March 26, 2020

Sickness is a paid leave permitted by the Labor Law (Article 169). Therefore, during sickness, employer needs to pay the salary of his employee. Highlights of this note If an employee falls sick, who pay the salary? What if an employee wants to stay home to take care of children or school closed or child […]

March 13, 2020

The spread of the novel coronavirus is creating a global emergency situation and negatively impacting almost every country in the world, including Cambodia. In response to this viral pandemic, the Royal Government of Cambodia, as well as the National Bank of Cambodia (“NBC”) is taking immediate action to steer the economy through this very difficult […]

January 28, 2020

One of the key tax considerations points which should be kept in mind in any investment project into Cambodia is the availability of the benefits under Cambodia’s Investment incentive, specifically the tax incentives once the investment project is registered as a qualified investment project (“QIP”). Highlights Typical power plant project structure with QIP status The […]

July 26, 2019

When applying Value Added Tax (“VAT”), a key consideration is the place of delivery of the goods or services, which is often determined by reference to the place of consumption. If goods are consumed outside of the territory, then they are considered to be export goods, and 0% VAT is usually applied. Likewise, services consumed […]

July 15, 2019

In June 2019, the Royal Government of Cambodia announced that a double taxation agreement (“DTA”) was signed with the Government of Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”), bringing the number of DTAs signed by Cambodia to seven. A summary of the significant features of the seven DTAs is […]

May 7, 2019

On 11 April 2019, the Ministry of Economy and Finance issued Circular 003 to confirm the tax treatment of seniority payments introduced by a 2018 amendment to the Labor Law and the issuance of Prakas 443 in September 2018. One of the many uncertainties that had been identified since the introduction of seniority payments as […]

April 30, 2019

The Royal Government of Cambodia has been working hard to stimulate investment and economic growth. The General Department of Taxation (“GDT”) is playing an important role in this process and many new tax regulations and procedural changes have been introduced to improve transparency and eliminate disincentives to investment. Many companies have not yet fully considered […]

April 22, 2019

On 5 April 2019, the Ministry of Economy and Finance issued Prakas 372 to introduce new rules on dividend withholding tax (“WHT”). This Prakas replaces Prakas 518, which was issued on 5 May 2017, and expands the definition of what is considered a dividend distribution, and thus subject to WHT. Readers should be reminded that, […]