12 July 2017
Tax Considerations in Cambodia
Tax regulations are overseen by the General Department of Taxation under the MOEF. The main laws and regulations governing tax rates and the payment of tax are:
- Law on Taxation (1997) – the principal taxation law that was amended in 2003
- Tax on Profit (2000) – certain tax provisions were stipulated and amended in 2003
- Financial Management Law (2017) – amended in many areas and came into force from January 2017
In Cambodia, taxpayers are grouped into small, medium and large taxpayers depending on their annual incomes:
- Small taxpayers – earning an annual income between KHR250 million (US$61,000) to KHR700 million (USD$171,000)
- Medium taxpayers – earning an annual income between KHR 700 million (about US$171,000) to KHR 2,000 million (US$490,000)
- Large taxpayers – earning annual income more than KHR 2,000 million (US$490,000)
An overview of the major types of taxes levied in Cambodia is provided in the table below. Other taxes may also be applicable, including additional tax on dividends. Cambodia signed its first ever double tax agreement with Singapore in May 2016, now awaiting ratification.
|Corporate Income Tax (CIT)/Tax on Profits (ToP)|
Corporate taxpayers in Cambodia are classified as either:
1. A resident taxpayer – primarily a company that has a place of management and carries on business in Cambodia. Subject to CIT/ToP on worldwide income.
2. A non-resident taxpayer – a company that derives Cambodian source income, but does not have a place of management in Cambodia. Subject to CIT/ToP on Cambodian source income only.
|20% (standard rate)|
30% (oil or natural gas production sharing contract and the exploitation of natural resources)
5% (for some insurance companies)
|Value Added Tax (VAT)|
Levied on the value added at each stage of the production and distribution supply chain. The amount levied depends on the type of good.
|0% (exports and certain goods)|
10% (standard rate)
|Personal Income Tax (PIT)|
PIT is applied as follows:
1. Individual residents of Cambodia are liable for worldwide income.
2. Individual non-residents are subject to income tax on Cambodian source income only. A credit for foreign income tax paid can be set against Cambodian income tax. Tax advice should be sought as tax conditions vary for each country.
|0% to 20%|
|Withholding Taxes (WHT) on Payments Abroad||WHT is applied on dividend, interest and royalty payments made abroad by companies.||14%|
|Specific Tax on Certain Merchandises and Services (STCMS)||STCMS is a form of excise tax that applies to importation or domestic production and supply of certain goods and services (e.g. cigarettes and alcohol, domestic and international telephone services).||3% to 35%|
|Patent Tax||An annual business registration tax which is required to be paid by 31st March. A “patent tax certificate” will be issued and the amount payable is dependent on if you are a small, medium or large taxpayer.||KHR400,000 (~USD98) to KHR5,000,000 (~USD1,200)|
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