Explore the requirements and rules that apply to indirect taxes in Cambodia.
What supplies are liable to the standard rate?
Supplies of goods and services in Cambodia and imported goods.
Are there any reduced rates, zero- rates or exemptions and if so, what do they apply to?
Zero rate applies to exported goods and services and certain charges in relation to the international transportation of people and goods. Also, this zero-rating is applicable for any goods and services supplied by Supporting Industry Qualified Investment Projects (QIPs)/contractors to certain export industries. VAT on the supply and import of certain agricultural products shall be borne by the State (i.e. State Charges).
The zero rate for exported services applies where such services are performed outside of Cambodia or effectively used outside of Cambodia, and the services must not be for business purposes or with an economic interest in Cambodia. Documents such as contracts, bank statements, invoices, etc., must also be maintained to prove the zero-rating treatment and for the tax administrations review.
Exempt supplies include public postal services; certain medical and dental goods and services; wholly state-owned public transportation services; insurance services; primary financial services; educational services; importation of articles for personal use that are exempt from customs duties; non-profit activities in the public interest recognized by the Ministry of Economy and Finance; supplies of unprocessed agricultural products; supplies of electricity; supplies of water for public consumption and solid and liquid trash collection or cleaning services.
An enterprise that is making taxable supplies, if it falls under one of the following criteria:
Is voluntary registration possible?
Is voluntary registration available for an overseas company or a fiscal representative?
Yes, VAT generally cannot be recovered when incurred in making exempt supplies; for non-business related purposes (such as entertainment); purchases or imports of automobiles; and purchases or imports of certain petroleum products.
Can an overseas company recover VAT if it is not registered?
How long does it typically take to obtain a VAT refund following a return filing?
The VAT regulation provided a specific timeframe based on the amount of the refund and category of the taxpayer (such as gold/silver/normal taxpayers).
However, in practice, the time taken to obtain the VAT refund is very time-consuming as a VAT refund audit is required to be conducted by the tax office prior to approving the refund.
Yes, valid VAT invoices shall disclose the name, address and VAT number of both the supplier and the customer; invoice date and invoice number; description of the supplies and the selling price before VAT; VAT amount; and signature of both the supplier and customer.
Moreover, VAT invoices are required to be issued in sequential order and in Khmer language (with English as a secondary language, if required).
Finally, amounts on VAT invoices may be denominated in USD, while the total invoice amounts must also be denominated in KHR.
There is no formal or binding ruling system in Cambodia.
A taxpayer can submit a letter seeking a ruling, but the tax office is usually reluctant to respond or does not respond at all. Obtaining a ruling from the tax office is likely to be a time-consuming process. Likewise, the tax authority is reluctant to give an informal opinion or ruling.
All information within this guide is provided by KPMG professionals in Cambodia and based on information available as of September 2019.