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Cambodia - Income Tax

Cambodia - Income Tax

Taxation of international executives


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Tax returns and compliance

When are tax returns due? That is, what is the tax return due date?

The salary tax return is due for lodgment by the 20th of the following month.  

What is the tax year-end?

Individuals are not required to submit annual personal income tax returns. Accordingly, the monthly salary tax deduction is considered to be a final tax for individuals.

What are the compliance requirements for tax returns in Cambodia? 


Employers or the resident representative of foreign employers, and employees are jointly responsible for the payment of tax on salary in Cambodia, regardless of whether the salary is paid in Cambodia or abroad.

A resident is subject to a monthly deduction of salary tax on salaries received from both Cambodian and foreign sources. The tax rate is on a sliding scale, with a top marginal rate of tax of 20 percent (refer to table). Salary tax is due to be paid by the 20th day of the month following the payment of salary. Currently, the tax law does not require a resident individual to submit an annual personal income tax return to the General Department of Taxation, and therefore, the monthly tax deducted is considered a final tax.


Non-residents are subject to a monthly deduction of salary tax on salaries received from Cambodian sources only. Cambodian-sourced salary is taxed at a flat rate of 20 percent.

Tax rates

What are the current income tax rates for residents and non-residents in Cambodia?


For residents, taxable salary includes salaries from both Cambodian and foreign-sources. The tax to be paid shall be determined on the gross monthly taxable salary and shall be withheld by the employer, in accordance with the progressive rates as follows:

Income tax table for 2018

Taxable income bracket* Total tax on income below bracket Tax rate on income in bracket
From KHR To KHR KHR Percent
0 1,200,000
0 0
1,200,001 2,000,000 60,000 5
2,000,001 8,500,000 160,000 10
8,500,001 12,500,000 585,000
12,500,001 Over 1,210,000

*This taxable income bracket has been revised in the 2018 Law on Financial Management and effective from 1 January 2018. There has been another revision made in December 2016, and effective from 1 January 2017 before this latest one.

The following relief is given to resident individuals:

Relief for each child per month  
(Condition under 14 years old or up to 25** years old if still at school) 150,000
Dependent spouse (who is no employed)** 150,000

*Before January 2017, residents were entitled for tax relief of KHR75,000 for each child and dependent spouse.


For non-residents, the taxable salary includes salary from Cambodian sources only and shall be withheld at a flat rate of 20 percent.

Residence rules

For the purposes of taxation, how is an individual defined as a resident of Cambodia?

An individual is considered a tax resident, if:

  • the individual is domiciled in Cambodia
  • the individual has a principal place of abode in Cambodia or
  • the individual is present in Cambodia for more than 182 days during the 12-month period ending in the current tax year.

A non-resident is any person who is not a resident.

Is there, a de minimus number of days rule when it comes to residency start and end date? For example, a taxpayer can’t come back to the host country for more than 10 days after their assignment is over and they repatriate.


What if the assignee enters the country before their assignment begins?


Termination of residence

Are there any tax compliance requirements when leaving Cambodia?

The employer is required to withhold the salary tax before making the final taxable salaries to the employee and declare the final monthly salary tax to the Cambodian tax authority. There should be no other tax compliance requirement for the individual employee to fulfil with the Cambodian tax authority, the individual is not required to file the annual personal income tax return.

What if the assignee comes back for a trip after residency has terminated?

No special tax compliance requirement if just coming back for a trip.

Communication between immigration and taxation authorities

Do the immigration authorities in Cambodia provide information to the local taxation authorities regarding when a person enters or leaves Cambodia?

We are unaware of it, however, in practice there may be minimal communication between government authority (i.e. the immigration authorities and local tax authorities).

Filing requirements

Will an assignee have a filing requirement in the host country after they leave the country and repatriate?

There is no personal income tax return to be lodged by the assignee. Currently, there is also no mechanism for an individual assignee to register with the local tax authorities and directly pay their salary and fringe benefit tax on their own, and hence only registered employers would do the compliance for the assignee.

The salary tax withheld by the employer is considered a final tax for the assignee.

Economic employer approach

Do the taxation authorities in Cambodia adopt the economic employer approach to interpreting Article 15 of the OECD treaty? If no, are the taxation authorities in Cambodia considering the adoption of this interpretation of economic employer in the future ? 1

KPMG in Cambodia is not aware of this interpretation by the Cambodian tax authorities. On 20th May 2016, Cambodia signed its first DTA agreement with Singapore. On 13th October 2016, Cambodia signed its 2nd DTA with China. Subsequently, on 27th July 2017, 9th September 2017, and 31 March 2018 additional DTAs were also signed with Brunei, Thailand and Vietnam respectively. At the date of publication of this guide, the Cambodian tax office implemented the four DTAs with Singapore, China, Brunei and Thailand as of 1 January 2018.

De minimus number of days

Are there a de minimus number of days before the local taxation authorities will apply the economic employer approach? If yes, what is the de minimus number of days?2

Not applicable.

Types of taxable compensation

What categories are subject to income tax in general situations?

As a general rule, it can be stated that all types of remuneration and benefits received by an employee within the framework of fulfilling employment activities constitute taxable income. These include wages and salary, bonuses, overtime, and other remuneration.

Tax-exempt income

Are there any areas of income that are exempt from taxation in Cambodia? If so, please provide a general definition of these areas. 

Employment-related payments received by a tax resident, which are not subject to salary tax, include:

  • reimbursement of business expenses by the employer, provided the costs were incurred in the course of employment, the amount is not excessive, and can be substantiated 
  • indemnity for layoff within the limit as stated in the labor law
  • additional remuneration received with social characteristics as provided in the labor law 
  • supply of free or subsidized costs of uniforms or special professional equipment used in the course of employment 
  • flat allowances for mission and travel costs received in the course of employment. The amount of the allowance shall not be in excess of the actual expenditure incurred.

Expatriate concessions

Are there any concessions made for expatriates in Cambodia? 


Salary earned from working abroad

Is salary earned from working abroad taxed in Cambodia? If so, how?

Resident taxpayers in Cambodia are liable to salary tax on Cambodian and foreign-sourced salary income, whereas non-resident taxpayers are subject to tax on Cambodian-sourced salary income only.

Taxation of investment income and capital gains

Are investment income and capital gains taxed in Cambodia? If so, how?

Non-employment income sourced within Cambodia is not subject to salary withholding tax. However, profits tax may be payable.

Dividends, interest, and rental income

Income from dividend, interest, and rental are not subject to salary tax; however, they may be subject to profit tax.

Gains from stock option exercises

Currently, there is no provision on taxability of stock options.

Foreign exchange gains and losses

Realized foreign exchange gains/losses are taxable/deductible for profit tax purpose.

Realized foreign exchange gains/losses are taxable/deductible for profit tax purpose.
Realized foreign exchange gains/losses are taxable/deductible for profit tax purpose.

Principal residence gains and losses

Not applicable.

Capital losses

Not applicable

Personal use items

Certain items provided by the employer for employee’s personal use are subject to fringe benefits tax at the rate of 20 percent.


Gifts are not tax deductible for profit tax purpose.

Additional capital gains tax (CGT) issues and exceptions

Are there additional capital gains tax (CGT) issues in? If so, please discuss?

Capital gain is subject to profit tax.

Are there capital gains tax exceptions in Cambodia? If so, please discuss?


Pre-CGT assets

Not applicable.

Deemed disposal and acquisition

No deemed disposal and acquisition provisions for tax purposes.

General deductions from income

What are the general deductions from income allowed in Cambodia? 

Tax is deducted from cash salary payable to employees. There is no general deduction from salary entitlement.

Tax reimbursement methods

What are the tax reimbursement methods generally used by employers in Cambodia? 

Based on receipts.

Calculation of estimates/ prepayments/withholding

How are estimates/prepayments/withholding of tax handled in Cambodia? For example, Pay-As-You-Earn (PAYE), Pay-As-You-Go (PAYG), and so on.


When are estimates/prepayments/withholding of tax due in Cambodia? For example: monthly, annually, both, and so on.

Monthly basis and required to be declared by 20th of the following month.

Relief for foreign taxes

Is there any Relief for Foreign Taxes in Cambodia? For example, a foreign tax credit (FTC) system, double taxation treaties, and so on? 

A resident taxpayer who has received foreign-sourced salary and who has paid taxes according to foreign tax laws shall receive a tax credit in Cambodia provided there is compliance with certain conditions.

General tax credits

What are the general tax credits that may be claimed in Cambodia? Please list below. 

There are no other general tax credits for resident employees apart from the earlier mentioned tax relief.


Sample tax calculation

This calculation assumes a married taxpayer resident in Cambodia with two children whose three-year assignment begins 1 January 2016 and ends 31 December 2018. The taxpayer’s base salary is USD100,000 and the calculation covers three years. 3

  2016USD 2017USD 2018USD
Salary 100,000 100,000 100,000
Bonus 20,000 20,000 20,000
Cost-of-living allowance 10,000 10,000 10,000
Housing allowance 12,000 12,000 12,000
Company car 6,000 6,000 6,000
Moving expense reimbursement 20,000 0 20,000
Home leave 0 5,000 0
Education allowance 3,000 3,000 3,000
Interest income from non-local sources 6,000 6,000 6,000

Average exchange rate used for calculation: USD1.00 = KHR4,000.

Other assumptions

  • All earned income is attributable to local sources.
  • Bonuses are paid at the end of each tax year, and accrue evenly throughout the year.
  • Interest income is not remitted to Cambodia.
  • The company car is used for business and private purposes and originally cost USD50,000. 
  • The employee is deemed resident throughout the assignment. 
  • Tax treaties and totalization agreements are ignored for the purpose of this calculation.
Calculation of taxable income
Year-ended 2016KHR 2017KHR 2018KHR
Days in Cambodia during year 365 365 366
Earned income subject to income tax      
Salary 400,000,000
Bonus 80,000,000
80,000,000 80,000,000
Cost-of-living allowance 0 0 0
Net housing allowance 0 0 0
Company car 0 0 0
Moving expense reimbursement 0 0 0
Home leave 0 0 0
Education allowance 0 0 0
Total earned income 480,000,000 480,000,000
Other income (interest income) 0 0 0
Total income 480,000,000 480,000,000
Deductions (dependent and spouse relief): 2,700,000 5,400,000 5,400,000
Total taxable income 477,300,000 474,600,000

Calculation of tax liability

  2016KHR 2017KHR 2018KHR
Taxable income as above/per month 39,775,000 39,550,000
Cambodian tax thereon 6,802,500 6,735,000
Domestic tax rebates (dependent spouse rebate      
Foreign tax credits      
Total Cambodian tax/per month 6,802,500
  • Number total taxable income divided by 12 months 
  • Note 1: Salary tax is declared and payable on a monthly basis. 
  • Note 2: Please note that cost-of-living allowance, housing allowance, company car, moving expense, home leave, and education allowances are taxed under the fringe benefits tax (at 20 percent and is borne by the employer). 
  • Note 3: Interest income is not subject to salary tax.


1Certain tax authorities adopt an ‘economic employer’ approach to interpreting Article 15 of the OECD model treaty which deals with the Dependent Services Article. In summary, this means that if an employee is assigned to work for an entity in the host country for a period of less than 183 days in the fiscal year (or, a calendar year of a 12-month period), the employee remains employed by the home country employer but the employee's salary and costs are recharged to the host entity, then the host country tax authority will treat the host entity as being the ‘economic employer’ and therefore the employer for the purposes of interpreting Article 15. In this case, Article 15 relief would be denied and the employee would be subject to tax in the host country.

2For example, an employee can be physically present in the country for up to 60 days before the tax authorities will apply the ‘economic employer’ approach.

3Sample calculation generated by KPMG Cambodia Ltd., the Cambodian member firm of KPMG International, based on Cambodian Ministry of Economy and Finance (MEF), Prakas no:1173 MoEF dated 31 December 2003 on Taxation of Salaries and other relevant tax regulations as issued by the MEF and tax authority from time to time.

© 2019 KPMG Cambodia Ltd, the Cambodian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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