The deadline for voluntary self-correction of tax returns is fast approaching, with only 30 days left for taxpayers to rectify their past tax returns without incurring penalties. Refer to our previous article: “The Power of Forgiveness: How Cambodia is Offering Unprecedented Tax Savings for the Confession of Past Unpaid Taxes“, Cambodia’s General Department of Taxation […]

Introduction In an attempt to break the logjam of outstanding tax audit disputes, the General Department of Taxation (“GDT”) in Cambodia has been actively working to make progress on these cases. Recent findings from a study that VDB Loi conducted in early March 2024 on Cambodian tax audits processing identified areas for improvement, including audit […]

The determination and taxation of the Cambodian sourced income of international shipping liners has long posed problems in this dynamic Southeast Asian country. As a longstanding manufacturing hub, imports of raw materials and export of finished and semi-finished products are hallmarks of Cambodia’s robust economy. However, the taxation of shipping lines has been an area […]

The promulgation of Sub-Decree 49 ANKr. BK (referred to as the “New Sub-Decree”) on Value Added Tax (“VAT”) marks a positive update to the existing taxation framework, particularly the 1999 Sub-decree 114 ANKr.BK on VAT. Enacted by the General Department of Taxation (“GDT”) on 11 March, 2024, this new Sub-Decree introduces important updates and amendments […]

Early in 2024, the General Department of Taxation (“GDT”) issued a new regulation to incentivize taxpayers to make revisions to their earlier tax returns. The unstated but nevertheless clear objective of the GDT is to encourage taxpayers who are or become aware of past under- or misdeclarations to voluntarily and unprompted make the necessary corrections […]

If you think air travel already got too expensive, you will not be happy to hear that ticket prices to and from Cambodia might be ready to fly even higher. On 26 September 2023, a recent industry meeting facilitated by the International Air Transport Association (IATA), the airport operator and the General Department of Taxation […]

VDB Loi’s Edwin Vanderbruggen and Laysym Sim facilitated the technical input at a consultation between Eurocham, Amcham and the GDT on 5 October 2023 at the GDT head office. Here is a selection by us of some of the key things that were discussed which may have practical impact for businesses and investors. Much of […]

The Specific Tax rate for non-alcoholic beverages produced and supplied locally will be adjusted and determined as follows, effective 1 September 2023: Separately, the Specific Tax base must be implemented as it is being done currently in accordance with the contents of Prakas No. 012 MEF.PrK dated 14 January 2020 for the Adjustment of Determining the Specific […]

The General Department of Taxation (“GDT”) issued a notification to notify taxpayers under the self-declaration regime of their obligation to file the 2022 annual tax on income return and to pay tax as follows:

Cambodia is set to implement the pension fund scheme beginning this month (October 2022). Under the scheme, employers and employees are required to contribute 50-50 into the fund. With the implementation, two questions have come up: Is the pension fund contributed by employee allowed to be deducted from salary before calculating Tax on Salary (“TOS”)? […]

As noted in a number of our previous tax alerts, implementation of VAT on e-commerce began in April 2022. Under the self-assessment regime, the regulations require that taxpayers apply the VAT reverse charge system to declare and pay 10% VAT to the General Department of Taxation (“GDT”) on any digital goods, services or e-commerce activities […]

Credit notes and debit notes are used when there is an over- or under-charge on a customer’s invoice. Article 49 of the VAT Sub-Decree dated 24 December 1999 outlines the circumstances when a credit or debit note should be issued: The supply has been cancelled. The nature of the supply has been fundamentally varied or […]

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 […]

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 […]

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 […]

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; […]

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 […]

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 […]

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 […]

Financing and tax 2018 saw several changes to the tax regulations. The application of transfer pricing rules in Cambodia is now a reality. Starting from 2018, companies have to comply with the regulations issued in October 2017, which adopt the arm’s length principle in accordance with the OECD’s guidelines. The regulations left many questions unanswered, […]