Last modified: 24/01/2025 03:27

Corporate taxation

	Rate
Corporate income tax rate	20
Branch tax rate	20
Capital gains tax rate (effective from 1 Jan 2025)	20

Residence: A company is resident in Cambodia if it is organised, managed, or having their principal place of business in Cambodia. An individual who are domiciled in, have a principal place of abode or have been in Cambodia for more than 182 days during the tax year.

Basis: Income tax is imposed on resident taxpayer for income from Cambodian sources and from foreign sources. For a non-resident taxpayer, the income tax applies only to Cambodian source income.

Taxable income: Taxable income is the net income that results from all types of business operations, including capital gains achieved during business or business termination, as well as income from financial or investment assets, wages and royalties. Taxable income also includes all capital gains from real estate, financial assets, or investment property achieved from operations other than business operations.

Significant local taxes on income: The annual income tax rates are as follows:

1. 20% for the income by a legal entity

2. 30% on the revenue from oil and natural gas distribution, the exploitation of natural resources, including forests, gold, or precious stones

3. 0% of eligible income from project investment within the tax exemption period set by the Council for the Development of Cambodia (CDC)

4. In accordance with the table of tax rates, the following shall be achieved for the income by the physical person, the enterprise and the shares allocated to each member of the joint-venture that is not considered a legal entity: – 0% for the income from KHR 0 to KHR 18,000,000 – 5% for the income from KHR 18,000,001 to KHR 24,000,000 – 10% for the income from KHR 24,000,001 to KHR 102,000,000 – 15% for the income from KHR 102,000,001 KHR to KHR 150,000,000 – 20% for the income greater than KHR 150,000,000 5. For enterprises with significant activities in the insurance, property or other risks, the income tax shall be as follows: A. 5% of gross premiums received during the tax year for any insurance or reinsurance of property or other risks in the Kingdom of Cambodia; B. For life insurance or life insurance activities other than property insurance or reinsurance; or Other Risks Income tax is regulated under Article 20 (1)

Alternative minimum tax: Minimum tax is separate tax other than corporate income tax. This tax is paid by taxpayer at the rate of 1% of total annual revenue. This tax is to be paid during the preparation of annual tax on income. The company with proper accounting record certified by the General Department of Taxation is exempted from minimum tax.

Taxation of dividends: 20% on the dividend paid before income tax. 0% on the dividend paid after income tax. Dividend paid to non-resident shareholders is subject to withholding tax 14%.

Capital gains: The Prakas 346 on Capital Gains was released for the public by the General Department of Taxation (“GDT”). Instruction 014 dated 9 October 2024, provided that the postponement of the implementation of capital gains taxes on real estate for physical persons will continue until the end of 2025. The implementation of the five (5) types of capital gains taxes, including leases, investment assets, goodwill, intellectual property, and foreign currencies, shall still begin from 1 January 2025 onward.

Losses: May be carried forward for five years and may be set off against any income or capital gains.

Foreign tax relief: Residents earning foreign-sourced income can receive credits for foreign taxes paid.

Participation exemption: n/a

Holding-company regime: There is no holding company regime.

Tax-based incentives: Tax incentives for Investment in Cambodia Tax incentives are varied based on the industries, for example, Qualified investment Project, agriculture..etc. The Council for Development of Cambodia (“CDC”) was established in 1994 to promote the growth of investment in Cambodia. It review investments applications and approves incentives. Basic Incentives Investment activities registered as Qualified Investment Project (“QIP”) are entitled to choose basic incentives under the following two options:

Option 1: – Income Tax exemption for 3 (three) to 9 (nine) years, depending on the sector and investment activities, from the time of earning its first income. Sectors and investment activities, as well as the period of income tax exemption, shall be determined in the law on financial management and/or the Sub-Decree. After the income tax exemption period has expired, the QIP is entitled to paying income tax at a progressive rate proportional to the total tax due as follows:  25 (twenty-five) percent for the first 2 (two) years;  50 (fifty) percent for the next 2 (two) years; and  75 (seventy-five) percent for the last 2 (two) years. – Prepayment Tax exemption during income tax exemption period; – Minimum Tax exemption provided that an independent audit report has been carried out; – Export Tax exemption, unless otherwise provided in other laws and regulations; or

Option 2: – Deduction of capital expenditure through special depreciation as stated in the tax regulations in force; – Eligibility of deducting up to 200 (two hundred) percent of specific expenses incurred for up to 9 (nine) years. Sectors and investment activities, specific expenses, as well as the deductible period, shall be determined in the Law on Financial Management and/or the Sub-Decree; – Prepayment Tax exemption for a specific period of time based on sectors and investment activities to be determined in the Law on Financial Management and/or the Sub-Decree; – Minimum Tax exemption provided that an independent audit report has been carried out; – Export Tax exemption, unless otherwise provided in other laws and regulations. In addition to the incentives stated above: – Export QIP and Supporting Industry QIP are entitled to customs duty, special tax and value-added tax exemption for the import of Construction Material, Construction Equipment, Production Equipment and Production Inputs; – Domestically Oriented QIP is entitled to customs duty, special tax and value added tax exemption for the import of Construction Material, Construction Equipment, and Production Equipment. The incentives for Production Inputs shall be determined in the Law on Financial Management and/or the Sub-Decree. In addition to the basic incentives set out in Article 26 of this Law on Invesment, investment activities registered as QIP receive additional incentives as follows:

1. Value-added tax exemption for the purchase of locally made Production Inputs for the implementation of the QIP.

2. Deduction of 150 (one hundred and fifty) percent from the tax base for any of the following activities:

– Research, development and innovation;

– Human resource development through the provision of vocational training and skills to Cambodian workers/employees;

– Construction of accommodation, food courts or canteens where reasonably priced foods are sold, nurseries and other facilities for workers/employees;

– Upgrade of machinery to serve the production line; and

– Provision of welfare for Cambodian workers/employees, such as comfortable means of transportation to commute from their homes to factories, accommodation, food courts or canteens where foods are sold at reasonable prices, nurseries and other facilities.

3. Entitlement to income tax exemption for the Expansion of QIP which will be determined in the Sub-Decree. In addition to the incentives set out in Article 26 and Article 27 of the Law on Investment, any specific sector and investment activities having high potential to contribute to national economic development may receive specific special incentives to be set out in the Law on Financial Management.

Group relief/fiscal unity: N/A

Small company/alternative tax regimes: Entity or business with annual turnover less than KHR250m (or approximately US$62.5k), or monthly turnover less than KHR20m (or approximately US$5k) is not required to register as a company.

Corporate taxation: compliance

Tax year: Usually it is 31 December. The company can change the year end other than 31 December for specific reason such as the company has holding company in different accounting period.

Consolidated returns: No.

Filing and payment: Within three months after the year end. For example: 31 March for the company has year end 31 December.

Penalties: Late filing will face penalty of at least 10%, 25% or 40% based on the severity of the tax payments, plus interest of 1.5% on total tax payments.

Rulings: Rulings may be obtained from the tax authorities.

Taxation of individuals

There is no Personal Income tax in Cambodia.  Only those employed  by the company is subject to Tax on Salary. Please refer to the rate in the basic box below.

Residence: There is no provision in the LOT for individual natural person to file personal income tax returns. There may be in the forthcoming few years soon. A natural person is expected to earn income either from employment or from business. Taxation on employment income (or known as Tax on Salary (“TOS”)) is deducted at source by employer. The employer is obligated under the LOT and TOS Prakas to report and remitted the TOS withheld to the GDT. Whilst a physical person resident in the Kingdom of Cambodia is also liable to TOS for Cambodian source salary and foreign source salary, the collection of TOS from the latter source would be difficult if the employer is not in Cambodia.

Basis: For resident employee: 0% for the salary from 0 – US$375 5% for the salary from US$375 – US$500 10% for the salary from US$500 – US$2,125 15% for the salary from US$2,125 – US$3,125 20% for the salary more than US$3,125 A rebate of approximately US$37.50 is claimable by: – either parents if both are subject to TOS, for each dependent child (age <14 years of age; or >14 and <25 years of age and a full-time student at an accredited institution); – a husband for a non-working spouse (i.e. housewife). Non-resident employee, the TOS is fixed at the rate of 20% of the total salary.

Other benefits such as housing, provision of low interest loans by employer, health or life insurance (unless provided to all employees), use of company’s car for private purposes or excessive allowance are subject to Fringe Benefits Tax (“FBT”). The FBT is 20% on market value of benefits received.

Taxable income: Salary, wage, bonus, incentives..etc.

Capital gains: Effective from 1 Jan 2025.

Deductions and allowances: A rebate of approximately US$37.50 is claimable by: – either parents if both are subject to TOS, for each dependent child (age <14 years of age; or >14 and <25 years of age and a full-time student at an accredited institution); – a husband for a non-working spouse (i.e. housewife).

Foreign tax relief: Taxes paid by resident taxpayers on foreign-source salary will be allowed as a credit against Cambodian salary tax on presentation of documentation confirming payment. The credit allowed is the amount of foreign tax paid or the proportion of salary tax on salary from all sources attributable to the foreign-source income, whichever is lower.

Taxation of individuals: compliance

Tax year: There is no provision in the Law for individual natural person to file personal income tax returns. So, currently only the employee is subject to Tax on Salary.

Filing and payment: Tax on Salary is calculated by the company who is also responsible for filling the tax to the tax authority.

Penalties: Late filing will face penalty of at least 10%, 25% or 40% based on the severity of the tax payments, plus interest of 1.5% on total tax payments.

Rulings: Rulings may be obtained from the tax authorities.

Withholding taxes

Type of Payment	Resident recipients		Non-residents recipients
	Company	Individual	Company	Individual
	Rate (%)	Rate (%)	Rate (%)	Rate (%)
Interest income (Please refer to detail below)	*	15	14	14
Royalties for intangibles and interest in minerals	15	15	14	14
Management, Consulting, Technical or similar services	n/a	15	14	14
Rental of moveable and immovable property, and income connected with the use of property	n/a	15	14	14

Interest Income:

1. Payment by a domestic bank or savings institution on: Fixed term deposit at 6% and Non-fixed term deposit at 4%.
2. Payment by resident taxpayer to domestic banks or savings institution is exempted from WHT.
3. Payment by a taxpayer to other than domestic banks or savings institution is at 15%.

Branch remittance tax: Remittance to non-resident company is subject to withholding tax of 14%. WHT rate is reduced to 10% if the company obtains DTA approval from the General Department on Taxation.

Anti-avoidance legislation

Transfer pricing: The Cambodian Ministry of Economy and Finance issued Prakas No. 986. MEF.P. (“Prakas 986”) on 10th October 2017. Prakas 986 regulates that Cambodian enterprises that have transactions with related parties must comply with new compliance requirements consisting of:

– An annual transfer pricing declaration, to be submitted together with the annual TOP (by 31 March annually); and

– Annual transfer pricing documentation, to be submitted upon request by the General Department of Taxation (“GDT”).

The five methodologies endorsed by Prakas 986 to determine an arm’s length price in a related party transaction are as per those set out by the Organization for Economic Co-operation and Development. Prakas 986 is effective from the signing date of 10th October 2017, with no clear indication of the first fiscal year to be applied.

However, with the GDT having published a new TOP 2017 form requiring declaration of transactions with related parties, the Prakas should be effective from 1 January 2018. Failure to comply with the above requirements may lead to: – Transfer pricing adjustments, which would result in additional tax;

– Tax penalties, which range from 10% to 40% of the additional tax for violations of the Law on Tax (LOT) according to Article 133 of the LOT, plus an interest charge of 2% per month on late payment; and – Any other actions stipulated under the LOT.

Interest restriction: N/A

Controlled foreign companies: N/A

Hybrid mismatches: N/A

Disclosure requirements: N/A

Exit taxes: N/A

General anti-avoidance rule: There is no general anti-avoidance provision contained in Cambodian tax law.

Digital services tax and Other significant anti-avoidance legislation: N/A

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Value-added tax/Goods and services tax

Type of tax: The self-assessment regime taxpayers who are making taxable supplies are obliged to register for VAT, and collect VAT from the supplying of goods or services to their customers. The term “good” means tangible property other than land or money. The term “service” means the provisions of something of value other than goods, land, or money.

Taxable supply The term taxable supply means:

– The supply of goods or services by a taxable person in the Kingdom of Cambodia. The taxable person is any taxpayer under the Real Regime Tax System and others as specified by regulations;

– The appropriation of goods for his own use by a taxable person; The making of gift or supply at below cost of goods or services by a taxable person;

– The import of goods into the customs territory of the Kingdom of Cambodia. Non-taxable supplies Non-taxable supplies are as follows:

– Public postal service;

– Hospital, clinic, medical, and dental services and the sale of medical and dental goods incidental to the performance of such services;

– The service of transport of passengers by wholly state owned public transportation system; – Insurance services; – Primary financial services;

– The imports of articles for personal use that are exempted from customs duties; – Non-profit activities in the public interest;

– The imports or the purchases of goods for use in the exercise of their official function of foreign diplomatic and consular missions, international organizations and agencies of technical cooperation of other governments. VAT Reverse Charge Sub-Decree 65 and Prakas 542 cover the supplies of digital goods or services via electronic systems or any e-commerce activities carrying out by non-resident suppliers from the outside of Kingdom of Cambodia into the Kingdom of Cambodia, and resident taxpayers who receive the supplies of digital goods or services or any e-commerce activities from non-resident taxpayers.

The following types of taxpayers are required to comply with Sub-Decree 65 and Prakas 542: 1. Non-resident taxpayers (suppliers of digital goods and services for the purpose of these regulations), are those who do not have permanent establishments (PE) in the Kingdom of Cambodia, and who supply digital goods or digital services and/or e-commerce activities to customers in the Kingdom of Cambodia.

These regulations also apply to non-resident electronic platform operators; and 2. Self-assessment taxpayers (tax registered customers of e-commerce for the purpose of these regulations) in Cambodia are those who receive digital goods, services and/or e-commerce activities from non-resident taxpayers. Under the new Sub-Decree 65 and Prakas 542 in 2021, Non-resident taxpayer provide digital goods or services or do Electronic Commerce to Cambodia has annual turnover exceed KHR250m (or approximately US$62.5k), or expects a taxable turnover of KHR60m (or approximately US$15k) in any consecutive 3 months in a fiscal tax year is required to register Simplified VAT within 30 days after the turnover reached the threshold. The entity is also required to file monthly tax return and pay VAT to the tax administration by the 20th of the following month.

Standard rate: 0% rate applies only to goods exported from the Kingdom of Cambodia and services consumed outside Cambodia. Exports are defined as including international transportation of passengers and goods. 10% This standard rate applies to all supplies other than exports and non-taxable supplies.

Reduced rates: N/A

Registration: A company shall register VAT before operating the business for the following entities: – Company Limited – Investment company – Import and export company – Company enter agreement with the Government. For other entities, the entity shall register VAT within 30 after reaching the threshold of KHR250m (approximately US$62.5k) per yea.

Filing and payment: The taxable person must file the monthly VAT return in the form prescribed by the tax administration by the 20th of the month following the month that the supplies have been made.

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Social security contributions

Contribution​​ payment

1. Obligation and contribution rate

Every employer or owner of an enterprise/establishment with 8 employees or more under the Law on Social Security Schemes for Persons defined the Provisions of the Labor Law shall mandatorily register and pay contributions to the National Social Security Fund (NSSF) for both occupational risk and health care schemes and other schemes.

         1.1. Occupational risk scheme

Contribution of occupational risk is only borne by the employer or owner of an enterprise/ establishment. The workers are not liable for paying such contribution.

The contribution rate of occupational risk is an agreeable rate prescribed by 0.8 % (zero point eight) of the contributory wage of worker’s gross wage.

Contribution Rate of Occupational Risk Scheme

Rank	Monthly wage (Riel)	Contributory wage (Riel)	Contribution (Riel) (0.8%)
1	Below 200,000	200,000	1,600
2	200,001-250,000	225,000	1,800
3	250,001-300,000	275,000	2,200
4	300.001-350.000	325,000	2,600
5	350,001-400,000	375,000	3,000
6	400,001-450,000	425,000	3,400
7	450,001-500,000	475,000	3,800
8	500,001-550,000	525,000	4.200
9	550,001-600,000	575,000	4,600
10	600,001-650,000	625,000	5,000
11	650,001-700,000	675,000	5,400
12	700,001-750,000	725,000	5,800
13	750,001-800,000	775,000	6,200
14	800,001-850,000	825,000	6,600
15	850,001-900,000	875,000	7,000
16	900,001-950,000	925,000	7,400
17	950,001-1,000,000	975,000	7,800
18	1,000,001-1,050,000	1,025,000	8,200
19	1,050,001-1,100,000	1,075,000	8,600
20	1,100,001-1,150,000	1,125,000	9,000
21	1.150.001-1.200.000	1,175,000	9,400
22	1,200,001 up	1,200,000	9,600

          1.2. Health care scheme

Contribution rate of health care scheme which is borne by employer or owner of an enterprise/establishment shall be determined by 1.3 (one point 3) percent of the contributory wage of worker’s gross wage.

Contribution rate of health care scheme which is borne by worker shall be determined by 1.3 (one point 3) percent of contributory wage of worker’s gross wage.

The contributory wage of worker’s gross wage for health care scheme shall be determined the same as occupational risk.

Contribution Rate of Health Care Scheme

Rank	Monthly wage (Riel)	Contributory wage (Riel)	Contribution (2,6% for one worker)
1	Below 200,000	200,000	5,200
2	200,001-250,000	225,000	5,850
3	250,001-300,000	275,000	7,150
4	300,001-350,000	325,000	8,450
5	350,001-400,000	375,000	9,750
6	400,001-450,000	425,000	11,050
7	450,001-500,000	475,000	12,350
8	500,001-550,000	525,000	13,650
9	550,001-600,000	575,000	14,950
10	600,001-650,000	625,000	16,250
11	650,001-700,000	675,000	17,550
12	700,001-750,000	725,000	18,850
13	750,001-800,000	775,000	20,150
14	800,001-850,000	825,000	21,450
15	850,001-900,000	875,000	22,750
16	900,001-950,000	925,000	24,050
17	950,001-1,000,000	975,000	25,350
18	1,000,001-1,050,000	1,025,000	26,650
19	1,050,001-1,000,000	1,075,000	27,950
20	1,100,000-1,150,000	1,125,000	29,250
21	1,150,001-1,200,000	1,175,000	30,550
22	1,200,001 up	1,200,000	31,200

1. Date of contribution payment

The date of the first contribution payment shall be regulated in a qualified period of 30 days following the date of the NSSF issues “Certificate of Enterprise/Establishment Regulation”. Every employer or owner of an enterprise/establishment shall pay the monthly contribution no later than 15^th of the following month. Employer or owner of an enterprise/establishment who fails to pay contribution on the determined date shall pay additionally 2% of interest charge of the actual amount of the monthly contribution and be liable for the fine as set forth in article 36 of the law on Social Security Schemes for Persons defined by the Provisions of the Labor Law.

1. Procedures and formalities of contribution payment

Employer or owner of an enterprise/establishment shall pay contribution to the account of the National Social Security Fund through ACLEDA Bank. The contribution payment shall be complied as follows:

• Employer or owner of an enterprise/establishment shall pay contribution directly to the contracted bank as before or
• Employer or owner of an enterprise/establishment shall pay contribution through ACLEDA Unity or Internet Banking. The service charge is borne by the employers.

Then employer or owner of an enterprise/establishment shall submit the contribution documents to NSSF as follows:

• Submit contribution documents directly to the NSSF head office or NSSF branches
• Submit contribution document via email: contribution@nssf.gov.kh

Employer or owner of an enterprise/establishment shall attach the relevant documents as follows:

• Worker’s registration form (E-Form)
• Payroll ledger
• Contribution payment receipt
• Employer’s verification letter (Form B)
• Bank slip

Employer or owner of an enterprise/establishment submitting the documents via Email or Web application shall scan contribution payment receipt, worker’s verification letter (Form B) and bank slip and copy the soft of E-form and payroll ledger.

The NSSF shall verify and issue a slip of contribution payment to employer or owner of an enterprise/establishment.

1. Checking on the payroll lager and employee’s list

Employer or owner of an enterprise/establishment shall submit payroll ledger, list of workers and other relevant documents to the NSSF for verifying when necessary.

Self-employed

N/A

Other taxes

Capital duty: N/A

Immovable property taxes: Property tax in Cambodia is officially known as the Tax on Immovable Properties (TOIP). Immovable properties include: land, houses, infrastructure, buildings, other construction, etc. TOIP imposes an annual tax rate of 0.1% on immovable properties that value over $25,000 (KHR 100 million).

Transfer tax: Transfer taxation, also known as registration tax or stamp duty, is a 4% tax imposed when there is a transfer of ownership for immovable property. Taxpayers must pay this transfer tax within three months of the property transfer.

Stamp duty: Stamp tax is imposed at the rate of 0.1% on the contract value of the public procurement contract for goods or services. Stamp duty is a 4% tax imposed when there is a transfer of ownership for immovable property.

Net wealth/worth tax: N/A

Inheritance/gift taxes: N/A

Other: Patent Tax The patent tax is a fixed tax payment and is paid by the end of March every year. The new taxpayer shall pay this tax in a full year amount if the business is started within the first half of the year, or pay in a half year amount if the business is started within the second half of the year. The taxpayer who has branches, warehouses, factories or workplaces for the same business in the same local jurisdiction is subject to only one patent tax payment, but if that taxpayer has different businesses in different local jurisdictions he shall pay the patent tax for each business and each jurisdiction.

The taxpayer must display the patent certificate at the principle place of business. Patent tax payment are as follow: – US$100 for Small sized taxpayer (sole-proprietor or partnership enterprise with annual turnover exceed KHR250m (or approximately US$62.5k) to KHR1,000m (or approximately US$250k), or has or expects a taxable turnover of KHR60m (or approximately US$15k) in any consecutive 3 months in a fiscal tax year) – US$300 for Medium sized taxpayer (incorporated entities including Representative Office, Associations, Non-governmental Organisations, and enterprise with annual turnover up to KHR4,000m (or approximately US$1m). – US$750 for Large sized taxpayer (Branch of foreign companies, QIPs approved by CDC, International Organisations and Agencies, Government Institutions, Foreign Diplomatic and Consular mission, and enterprise with annual turnover exceed KHR4,000m (or approximately US$1m). If annual turnover exceed KHR10,000m (or approximately US$2.5m), the patent tax is US$1,250.

Tax treaties

Cambodia has signed Double Taxation Agreement (“DTA”) with: – Singapore (1 Jan 2018) – Thailand (1 Jan 2018) – China (1 Jan 2019) – Brunei Darussalam (1 Jan 2019) – Vietnam (1 Jan 2020) – Hong Kong SAR (1 Jan 2020) – Malaysia (1 Jan 2021) – Indonesia (1 Jan 2021) – Republic of Korea (1 Jan 2022) – Turkey (1 Jan 2024) – Macao SAR (1 Jan 2024) DTA with certain countries are still under-negotiation stage, such as with Japan, Lao PDR, the Philippines, Myanmar, UAE, France and Morocco. Cambodia has plan to sign DTA with Qatar, India and UK in the future. One of the key features of the DTAs, from a Cambodian taxpayer perspective, is the ability to utilise a reduced withholding tax rate on payments relating to dividends, royalties, interest, or technical service fees to tax residents in the countries that have signed a DTA. The standard withholding rate on payments made by a Cambodian taxpayer to a non-resident is 14% whereas under the DTA’s that are in effect this may be reduced down to 10% in most cases. DTA’s treaty WHT rates are subject to prior approval by the GDT. Any approvals are valid for one year. Payments made prior to approval are subject to non-treaty WHT rates.