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Taxation in Cambodia

Tax on Profit (‘’ToP’’): 20% with the following exceptions:

  • 30% of the profit realized under an oil or natural gas production sharing contract and the exploitation of natural resources including timber, ore, gold and precious stones;
  •  0% of the profit of QIP during the tax exemption period as determined by Council for the Development of Cambodia (‘’CDC’’) (for a maximum of nine years depending on the business and provided that all conditions for qualifying for QIP status are met).
  • 5% on gross premiums received in Cambodia by insurance companies engaged in the insurance or reinsurance of life, property or other risks and 20% on non-insurance income.
 
Minimum tax: 1% of the annual turnover. Payable by taxpayers regardless of profit or loss. However, if the ToP liability exceeds the minimum tax liability, the minimum tax is not applicable. If the minimum tax liability exceeds the ToP liability, the minimum tax becomes payable.
 
Patent tax: KHR 1,140,000 (approximately USD 285), standard rate. Patent tax is an annual business registration tax which all enterprises carrying on business activities in Cambodia are required to pay by the 31st of March. A “patent tax certificate” is issued by the Tax Office upon registration.
 
Corporate Residence: A company is considered as Cambodian resident if it the management and control of its affairs are exercised in Cambodia (its principal place of business is Cambodia). A non-resident taxpayer is an enterprise that derives Cambodian source income, but does not have a place of management in Cambodia.
 
However, a non-resident taxpayer is deemed to be a Cambodian resident and shall pay tax in Cambodia if it is found to have a permanent establishment there.
 
A resident taxpayer is subject to CIT/ToP on a worldwide basis (i.e income derived from both Cambodian and foreign sources), whereas a non-resident taxpayer is liable to CIT/ToP in respect of its Cambodian sourced income only.
 
Withholding tax: Dividends, royalties (including rent and other payments connected with the use of properties) and interest paid by a resident to a non-resident are subject to a 14% withholding tax. The same withholding tax rate also applies to compensation for management or technical services.
 
Please note that Cambodia has entered into its first DTA with Singapore with a reduced withholding tax rate of 10%. The treaty will become effective after ratification in both countries.
 
Tax on salary: 20%. Under Cambodian Law, the term ‘’salary’’ refers to any remunerations, wages, bonuses,  overtime, compensation and fringe benefits which are paid to a director or indirect employee benefits in the course of  employment.