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Overview of Taxation in Cambodia

:: Corporate Income Tax
:: Value Added Tax (VAT)
:: Zero Rated VAT
:: Specified Business Tax (SBT)
:: Personal Income Tax
:: Personal Income Tax Deductions
:: Other Taxes

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Taxation in Cambodia - Corporate Income Tax

The Revenue Code outlines regulations for the imposition of taxes on income, with income tax divided into three categories: Corporate income tax, value added taxes (or specific business taxes), and personal income tax.

Corporate Income Tax
The general principle of Corporate Income Tax is based on the collection of tax on net profit arising from or in the consequence of the business carried out within an accounting period from the following juristic entities:

:: Incorporated firms operating in Cambodia pay income tax at a rate of 30 percent of net profits. Foundations and Associations pay income taxes at a rate of 2 to 10 percent of gross business income, depending upon the activity however not foundations and associations designated as tax exempt organizations. International transport companies face a rate of 3 percent of gross ticket receipts and 3 percent of gross freight charges.
:: All companies registered under Thai law are subject to taxation as stipulated in the Revenue Code and are subject to income tax on income earned from sources within and outside of Cambodia. Foreign companies not registered or not residing in Cambodia are subject to tax only on income derived from sources within Cambodia.
:: Normal business expenses and depreciation allowances, at rates ranging from 5 to 20 percent, depending on the item, or at rates under any other acceptable depreciation method, are allowed as deductions from gross income. Inventory must be valued at cost or at market price, whichever is lower. Net losses can be carried forward for up to five consecutive years.
:: Inter-corporate dividends are exempt from tax on 50 percent of dividends received. For holding companies and companies listed on the SET, dividends are completely exempt, provided the shares are held three months prior to and after the receipt of dividends.
:: For gifts and donations can be deducted up to a 0.3 percent of income earned, or of paid-up capital at the closing date of the accounting period, whichever is greater.
:: Depreciation of assets of limited companies and partnerships is based on cost. The rates of annual depreciation permitted by the law generally vary from 10 to 20 years.
:: Entertainment and representation expenses are deductible up to maximum limits as a percentage of gross sales, or of paid-up capital at the closing date of the accounting period, whichever is greater.
:: A corporate taxpayer must file a half-year return and pay 50 percent of the estimated annual income tax by the end of eighth month of the accounting period. Failure to pay the estimated tax or underpayment by more than 25 percent may subject the taxpayer to a fine amounting to 20 percent of the amount in deficit.
:: Failure to file a tax return, late filing or filing a return containing false or inadequate information may subject the taxpayer to various penalties. Failure to file a return, and subsequent noncompliance with an order to pay the tax assessed, may result in a penalty equal to twice the amount of tax due. Penalties are due within 30 days of assessment.
:: A corporate taxpayer that overpays its taxes and duties is entitled to claim a refund from the Revenue Department within a period of 3 years from the last day of tax filing for the applicable accounting year by using from Khor No.10.

 

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