
Additional Tax Relief in the Fourth Round of Stimulus Measures to Respond to the Ongoing COVID-19 Pandemic
May 29, 2020Due 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 out, and includes new tax relief for banks and financial institutions.
Extension of previous tax relief measures for another two months
The previous tax relief measures that covered the following sectors for the period March to May 2020 have been extended as follows:
Tourism sector
All companies in the tourism sector (i.e. hotels, guesthouses, restaurants, and travel agents) will continue to be exempt from the payment of all monthly taxes for another two months (i.e. for June and July 2020). This applies to businesses that are registered with the General Department of Taxation (“GDT”) and have business activities in Phnom Penh, Siem Reap, Preah Sihanouk, Kep, Kampot, Bavet, or Poi Pet.
Aviation sector
All airline companies established in Cambodia are granted exemption from Minimum Tax for another two months, i.e. for June and July 2020.
Reduced Withholding Tax rate on loans sourced from both local and overseas lenders
New loans
The Withholding Tax (“WHT”) rate on interest of loans borrowed by banks and microfinance institutions from either local or overseas lenders, is reduced from 15% (for local lenders) or 14% (for overseas lenders) to:
- 5% for all countries, regardless of whether or not there is a Double Taxation Agreement with Cambodia, for the year 2020.
- 10% for all countries, regardless of whether or not there is a Double Taxation Agreement with Cambodia, for the year 2021.
Existing loans
The WHT rate on interest of existing loans borrowed by banks and microfinance institutions from either local or overseas lenders, is reduced from 15% (for local lenders) or 14% (for overseas lenders) to 10% for the year 2020.
We understand that the RGC is closely observing the socio-economic impacts of the current global pandemic, and will set forth further measures to provide appropriate support to businesses as needed. We will keep you posted when we receive further updates from the RGC.
If you have any questions on this alert, please contact the undersigned or your usual VDB Loi adviser.
Related Articles
- Prime Minister Lines Up Wide Range of Tax Incentives
- November 14, 2023 - Fasten Your Seatbelts: Turbulence Ahead for the Taxation of International Airlines in Cambodia
- October 11, 2023 - Eurocham, Amcham and VDB Loi meet with GDT to help fix tax issues for foreign investors in Cambodia
- October 11, 2023 - Cambodian Tax Update: Instruction on Guidelines for Requesting VAT Credits and Refunds
- September 18, 2023 - Notification No. 28271 GDT dated 15 August 2023 on “Adjustment of the Specific Tax Rate on Locally Manufactured Non-alcoholic Beverage Products”
- August 30, 2023