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Taxation in Cambodia


Until 1975, indirect taxes were the most profitable source of domestic revenue, especially such monopoly excises as the sales tax on salt. Other indirect taxes included those on alcohol, tobacco, sugar, radios and livestock. Taxes ceased to exist with the abolition of currency during the Pol Pot regime and were replaced by payments in-kind. In 1984, the PRK introduced an agricultural tax to soak up profits earned by private farmers. The tax reportedly amounted to about 10% of total output. In 1986, taxes on private business were increased, which forced some shopkeepers out of business. In 2002, there was a general corporate tax of 9%, except for in the fields of resource exploitation.

Taxation on Business & Investment

Most foreign investments and foreign investors will be affected by the following taxes:

• Tax on Profit;
• Minimum Tax;
• Various withholding taxes (e.g. Tax on profit withholding obligations);
• Value Added Tax;
• Turnover Tax;
• Import Duties;
• Salary Tax on Cambodian and expatriate employees

There are various other taxes affecting certain categories of investor, including:

• Specific Tax on Certain Merchandise and Services;
• Various other minor taxes.

Scope of Taxation

Cambodia's taxation rules vary according to a particular taxpayer's 'regime'. Most activities associated with foreign investments fall into the 'real regime'. Therefore, unless otherwise stated, the following text refers to real-regime taxpayers.

Tax on Profit seeks to tax business profits and designated passive income. Business profits include capital gains. Passive income includes interest, royalties and rental income. Dividend income is usually exempt.

Various taxpayer entities are recognised, including companies, partnerships and individuals. In addition, there is an internationally recognised Permanent Establishment (PE) definition included in the recent 1997 Law on Taxation.

Residency & Source

Cambodian residents are taxable on worldwide income/profits, while non-residents are taxable only on Cambodian – sourced income/profits. Residents earning foreign-sourced income/profits are entitled to receive credits for foreign taxes incurred.

Cambodian residents include companies that are 'organised or managed' in Cambodia, or that have their 'principal place of business' in Cambodia. In terms of individuals, a non-Cambodian national will be considered a resident by having a 'domicile' or making his/her 'principal place of abode' in Cambodia, or by being present in Cambodia for more than 182 days in a calendar year.

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