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Cambodia: VAT on sales of long-term tangible assets

Cambodia: VAT on sales of long-term tangible assets

The General Department of Taxation issued guidance concerning value added tax (VAT) on sales of long-term tangible assets or in certain instances when businesses stop using these long-term assets.


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The guidance—Instruction No. 15301 (22 June 2020)—provides that the application of VAT on the sale of long-term tangible assets will follow these rules:

  • A sale of long-term assets by an enterprise—including a grant as a donation, a supply that is under the market value or a transfer to another enterprise (except during a transfer of a business)—is subject to VAT at a rate of 10%. The VAT assessment will be based on the fair market value of the asset.
  • For long-term tangible assets that are “ceased to be used” in the business:
    • If the long-term asset received an input tax credit at purchase, the asset will be treated as sold when the business ceases to use it, and the asset will be subject to VAT at a rate of 10% of its fair market value at the time of cessation of use.
    • If the long-term asset did not receive an input tax credit at purchase, it will not be treated as sold and will not be subject to VAT when it is no longer used by the business; however, the asset will be subject to the VAT rate of 10% when it is actually sold.

The concept “long-term assets ceased to be used” refers to long-term assets that are retained but no longer used by the enterprise in its business activity.

Enterprises that make non-taxable supplies—and thus input tax credit was not allowed for the purchase of long-term tangible assets—are to impose VAT at a rate of 10% when they sell those long-term tangible assets.

Instruction No. 15301 replaces a previous Instruction No. 11581 (5 May 2020) concerning the VAT imposed on disposition of business assets.

Read a June 2020 report [PDF 181 KB] prepared by the KPMG member firm in Cambodia

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