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2.
The rules and procedures for the payment of the tax on profit for an
insurance company shall be determined by prakas of the Ministry of
Economy and Finance.
Article 22:
Tax on Unrelated Business Profit
For an unrelated business the tax on profit
shall be determined as follows:
-
The tax on profit shall be fixed at 20 percent of taxable income
from unrelated business income of organizations as stated in
article 9 of this law.
-
For purposes of the tax on profit, the term “unrelated business
taxable income” is the gross income realized from an unrelated
business regularly carried on by any organization, reduced by
the deductions which are directly related to the carrying on of
such business and which are allowed by the provisions of tax on
profit.
-
The term “unrelated business” means any commercial or industrial
business, or any other business of the organization aiming to
obtain profit or funds and which are not substantially related
to the purpose or function constituting the basis for tax
exemption as stated in article 9 of this law.
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Article 23: Advanced
Tax on Dividend Distributions
The advanced tax on dividend distributions
shall be determined as follows:
-
If an enterprise distributes dividends to its domestic and
foreign shareholders during the tax year, it shall withhold and
pay as tax an amount equal to the product of the amount of the
dividend grossed up by the tax on profit rate and multiplies by
the appropriate annual tax rate as stated in article 20 of this
law.
-
The above mentioned withheld tax shall become a tax credit
against the tax on profit of the dividend distributing
enterprise for the tax year in which the withholding takes
place. If the tax credit exceeds tax on profit such excess shall
be carried forward and shall become a tax credit for the
following year. The tax withheld on dividend distributions made
by an insurance enterprise taxable under article 21 of this law
cannot be used for tax credit.
-
An enterprise (hereinafter called the “first enterprise”) owning
20 percent or more in value of the equity in a second enterprise
shall establish a dividend account. Whenever the first
enterprise receives a dividend on which the tax has been paid
from the second enterprise it shall record the amount of that
dividend into its dividend account. When the first enterprise
subsequently distributes dividends to its shareholders the
amount distributed which are taken out of the dividend account
shall not be subject to withholding tax under paragraph 1 of
this article.
-
A physical person or enterprise receiving a dividend from an
enterprise required to withhold tax under paragraph 1 of this
article or a dividend from a dividend account described in
paragraph 3 of this article shall not include such dividend in
income.
Section 5: other taxes
Article 24:
Minimum Tax
A minimum tax is imposed on taxpayers subject to the real regime
system of taxation. The minimum tax is a separate and distinct tax
from the tax on profit. This tax is payable by a taxpayer subject to
the real regime system of taxation even if the taxpayer has been
granted the status of an investment enterprise. The minimum tax is
imposed at the rate of 1 percent of the annual turnover inclusive of
all taxes and is payable at the time of the annual liquidation of
the tax on profit.
The
minimum tax may be reduced by the annual tax on profit that is
actually paid according to the rules found in articles 37, 38, and
39 of this law.
Section 6: Withholding Taxes and Prepayment of Tax on Profit
Article 25:
General Withholding Tax
The general withholding tax shall be
determined as follows:
-
Any resident payor making any payment in cash or in kind to a
resident person shall withhold, and pay as tax, an amount
according to the below mentioned rates which are applied to the
amount paid before withholding the tax:
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-
The rate of 15 percent on:
-
income received by a physical person from the performance of
services including management, consulting, and similar services;
-
royalties for intangibles and interests in minerals, oil or
natural gas, and interest paid to a physical person or an
enterprise except interest paid to a domestic bank or savings
institution.
-
The rate of 10 percent on the income from the rental of movable
and immovable property.
-
The rate of 5 percent on interest paid by a domestic bank or
savings institution to a resident physical person having a
non-fixed term savings account.
-
The withholding in this article shall not apply to the payment
of tax exempt income as stated in article 9 of this law.
-
For purposes of this article and article 26 of this law, the
term “resident payor” means:
a. any resident enterprise or pass-through;
b. any physical person, but only with respect to payments made
by such physical person in carrying on a business in the Kingdom
of Cambodia.
Article 26:
Withholding on Payments to Foreign Persons
A resident payor making any payment of Cambodian source income to a
non-resident person shall withhold, and pay as tax, an amount equal
to 15 percent of the payment before withholding.
This article shall not apply to dividends as stated in article 23 of
this law.
Article 27: Withholding
Tax as Final Tax
The tax withheld on distributions under article 23 of this law, on
payments to a resident physical person under article 25 of this law,
and on payments to a non-resident person under article 26 of this
law shall be considered the final tax on the recipients of the
payments or distributions described in those articles.
Article 28:
Prepayment of the Tax on Profit
An enterprise liable to the tax on profit according to the real
regime system of taxation including an investment enterprise liable
to the tax on profit at the rate of 9 percent, has the obligation to
make a monthly prepayment of the tax on profit at the rate of 1
percent of turnover inclusive of all types of taxes realized in the
previous month. This prepayment will be deducted from the tax on
profit at the annual liquidation of the tax.
Section 7: Obligations of Taxpayers
Article 29:
General Obligations of Real or Simplified Regime System Taxpayers
Real or simplified regimes system taxpayers have the obligations:
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1.
All taxpayers liable to the tax on profits who must pay taxes
according to the real regime or simplified regime system of taxation
shall send every year to the tax administration a declaration of the
profit they have realized in the previous tax year. This declaration
must absolutely be registered in the period of 3 months after the
end of the tax year.
2. Real regime system taxpayers must submit to the tax
administration a tax declaration to which is attached:
3. Simplified regime system taxpayers must submit to the tax
administration a tax declaration with attached documents in the form
provided by the tax administration.
4. An enterprise with a loss must submit a tax declaration in the
same manner and period of time.
Article 30: Obligation
of Estimated Regime System Taxpayers
Estimated regime system taxpayers have the obligations:
-
The taxpayer subject to estimated regime system of taxation must
submit the tax declaration to the tax administration every year
by October 31, in the form provided by the tax administration.
-
The amount of estimated profit is determined by the tax
administration after verification and consultation with the
businessman or his representative. This estimated profit is
calculated according to the profit rate with consideration to
the type and activities of the business which shall be
determined by Prakas of the Ministry of Economy and Finance.
-
This tax level on estimated profit shall be kept constant for a
period of 3 months, 6 months or 1 year.
-
The taxpayer subject to the tax on profit under estimated regime
system of taxation shall pay this tax every month at the time
fixed by the tax administration.
Article 31: Obligations
of Withholding Agents
The person or designated payor who withholds tax under articles 25,
and 26 of this law, or withhold tax on dividends under article 23 of
this law shall submit a tax declaration and pay the tax withheld to
the tax administration in the form as specified by the tax
administration by the 15th day of the month following the month in
which the withholding is made.
Article 32:
Obligations of Persons Required to Make Prepayments of the Tax on
Profit
Persons required to make prepayments for the tax on profit shall
submit a tax declaration and pay the prepayment of the tax on profit
to the tax administration in the form as specified by the tax
administration by the 15th day of the month following the month in
which the liability arose.
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Section 8: Sources of Income
Article 33:
Income from Cambodian Sources
Except for contrary provisions in this law, the income as below shall
be treated as from sources within the Kingdom of Cambodia:
-
interest paid by a resident enterprise or resident pass-through,
or a governmental institution of the Kingdom of Cambodia;
-
dividends distributed by a resident enterprise of the Kingdom of
Cambodia;
-
income from services performed in the Kingdom of Cambodia
-
income from the rental of movable or immovable property for use
in the Kingdom of Cambodia;
-
royalties from the use, or right to use intangible property in
the Kingdom of Cambodia;
-
gain from the sale of immovable property located in the Kingdom
of Cambodia or from the transfer of any interest in immovable
property situated in the Kingdom of Cambodia;
-
gain from the sale of movable property, other than inventory,
where the seller is a resident of the Kingdom of Cambodia;
-
premiums from the insurance or reinsurance of risks in the
Kingdom of Cambodia.
Article 34: Income
from Foreign Sources
The definition of foreign source income is obtained by taking the
income definition as stated in article 33 of this law and
substituting the term “a country other than the Kingdom of Cambodia”
for the term “the Kingdom of Cambodia”
Article 35: Determination
of Source
Where there is insufficient information to determine the source of
income, or where the rules set forth so far cannot clearly reflect
the income is from any one source the tax administration is the one
to decide on the source of that income.
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Section 9: Calculation of Annual Tax Due
Article 36: Foreign
Tax Credit
A resident taxpayer who has received income from foreign sources and
who has paid taxes according to foreign tax law shall receive a tax
credit for deduction from the tax on profit to be paid in the
Kingdom of Cambodia under the condition that there is presentation
of documents confirming this tax payment abroad.
In order to calculate the tax to be paid in the Kingdom of Cambodia
before deduction of this tax credit, the total amount of income
received from Cambodian sources and foreign sources shall be taken
into account.
The tax credit is determined separately for the tax paid by a
Cambodian resident in each foreign country. But, the tax credit to
be allowed for deduction in the tax year is the smaller of:
-
the tax amount actually paid in a foreign country,
-
the amount obtained by multiplying the total tax on profit from
all sources for the same period calculated according to the tax
rate in article 20 of this law with the ratio of income received
in that foreign country to the total income from all sources.
The
foreign tax credit is possible only if the resident taxpayer has
complied with the formalities and supplied various documents as
specified by the tax administration especially certification from
the foreign tax payor and from the foreign tax administration.
In the case where the tax credit exceeds the tax liability, the
amount of the excess may be carried forward to be used in succeeding
years up to the fifth counting from the year following year in which
the credit arose. In the case of tax credits in more than one year
the credits must be taken in the order in which they arose.
Article 37: Determination
of the Liability to the Tax on Profit
The calculation of the liability to the tax on
profit shall be as follows:
-
calculate the total tax liability according to article 20 of
this law,
-
minus any article 36 foreign tax credit but not in excess of the
tax liability in paragraph 1 of this article,
minus
any tax paid by the taxpayer on dividend distributions under article
23 of this law but not in excess of any tax liability after the
reduction for the foreign tax credit as in paragraph 2 of this
article.
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Article 38:
Determination of Tax Due or Tax Credit for the Tax Year
The determination of tax due or tax credit for
the tax year shall be as follows:
-
If the result from the calculation in article 37 of this law is
greater than the sum of any withholding tax made on the behalf
of the taxpayer under article 25 of this law, and the
prepayments for the tax on profit made by the taxpayer for the
tax year under article 28 of this law, the taxpayer shall pay
the difference to the tax administration.
-
If the result from the calculation in article 37 of this law is
less than the sum of any withholding tax made on the behalf of
the taxpayer under article 25 of this law, and the prepayments
for the tax on profit made by the taxpayer for the tax year
under article 28 of this law, the taxpayer may, after properly
accounting for any minimum tax liability, apply for a refund of
the difference, or carry the difference forward to be used as a
prepayment in the following year.
-
Before making any tax payment under paragraph 1, or claiming any
refund under paragraph 2, the taxpayer must first determine any
liability for the minimum tax according to the procedures as
stated in article 39 of this law.
Article 39:
Determination of the Minimum Tax, and the Tax Due or the Tax Credit
for the Tax Year
The determination of the minimum tax, the tax
due or the tax credit for the tax year shall be as follows:
-
The taxpayer must pay the minimum tax at the time of the
liquidation of the tax on profit. The minimum tax due may be
reduced by any liability for the tax on profit under article 20
of this law for the same tax year.
-
If the liability for the tax on profit exceeds the liability for
the minimum tax:
a. the taxpayer shall pay any tax due under article 37 of this
law at the time of submission of the tax declaration;
b. if the withholding in articles 25 and 28 of this law exceeds
the minimum tax liability the taxpayer may claim a tax credit;
c. in the case as stated in paragraph 2 of this article, the
taxpayer is not liable for minimum tax.
-
If the liability for the tax on profit is less than the
liability for the minimum tax:
a. the taxpayer’s tax credit under paragraph 2 of article 38 of
this law will be reduced by the difference;
b. the amount by which the tax credit is reduced in complying
with the sub-paragraph a of this paragraph, shall be considered
as payment of the minimum tax for the tax year.
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Chapter 2
Provisions for The Tax on Salary
Section 1: General Provisions
Article 40: Charge
to Tax
The provisions for the tax on salary as stated in the Finance Act of
1995 promulgated by the Royal Kram No. 11NS94 dated 31 December 1994
shall be amended as follows for the benefit of the State Budget.
Article 41: Object
of Tax
The tax on salary is a monthly tax imposed on salary that has been
received within the framework of fulfilling employment activities.
A
physical person resident in the Kingdom of Cambodia is liable to the
tax on salary for Cambodian source salary and foreign source salary.
A non-resident physical person is liable to the tax on salary for
Cambodian source salary.
Article 42: Definitions
For the purposes of the provisions for the tax
on salary:
-
The term “resident” when used for an employee, taxpayer, or
physical person means domiciled in, or having a principal place
of abode in, the Kingdom of Cambodia, or present in the Kingdom
of Cambodia on more than 182 days in the calendar year.
-
The term “non-resident” means not resident.
-
Except for contrary provisions, any reference to the terms
employee, taxpayer, and physical person are references to both
residents and non-residents as defined in this article.
-
The term “employer” includes any government institution, any
resident legal person, any resident pass-through, any permanent
establishment in the Kingdom of Cambodia, any non-profit
organization, or any resident physical person carrying on a
business.
-
The term “employee” means any physical person receiving salary
from their employment activity including any governmental
officer, any elected official and the officer or director of an
enterprise.
-
The term “Cambodian source salary” means salary received within
the framework of fulfilling employment activities in the Kingdom
of Cambodia. As for the salary received by a non-resident for
furnishing technical assistance it shall be treated as from
sources in the country where the payor of such income resides.
-
The term “foreign” means:
a. when used with respect to an physical person means non-
resident;
b. for the determination of the source of income, means outside
of the Kingdom of Cambodia.
-
The term “salary” means remunerations, wages, bonuses, and
overtime, compensations and fringe benefits which are paid to an
employee, or which are paid for the direct or indirect advantage
of the employee for the fulfillment of employment activities.
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Section 2: Tax Exempt Salary
Article 43: Salary
of Diplomatic and Other Foreign Officials
The tax exemption for the salary of diplomatic
and foreign officials shall be as follows:
-
Shall be exempted from the Tax on Salary:
a. Salaries that officers and employees of a diplomatic or
consular mission of a foreign government holding a diplomatic or
official passport of that government have received within the
framework of fulfilling their official function in the Kingdom
of Cambodia.
b. Salaries that foreign representatives, officials and
employees of international organizations and of agencies of
technical cooperation of other governments have received within
the framework of fulfilling their official function in the
Kingdom of Cambodia.
-
Any tax exemption in this article shall be based on the
principle of reciprocity between the governments concerned.
Article 44: Tax
Exempt Income of Employees
Shall be tax exempted:
-
Real refunds on professional expenses made by the employee under
the assignment and for the benefit of the employer and which
satisfy the 3 following conditions:
a. made for the direct and exclusive interest of the
enterprise;
b. not exaggerated nor extravagant;
c. supported by detailed invoices already paid and made in the
name of the recipient of the real expense refund.
-
Indemnity for the layoff within the limit as provided in Labor
Law.
-
Additional remuneration with social characteristics where there
is provision in Labor Law.
-
Supply gratis or below acquisition cost of special uniforms or
professional equipment.
-
Flat allowance for mission and travel expenses. This allowance
should not overlap the real expense refund provided in this
article.
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Section 3: Monthly Tax Base, Monthly
Taxable Salary and the Determination of the Monthly Tax
Article 45: Monthly
Tax Base
Except for fringe benefits taxable under article 48 of this law the
monthly tax base for a resident is the taxable salary from which is
deducted:
-
withholding obligations as the result of the compliance with the
Labor Law in order to create pensions and for the maintenance of
social welfare;
-
payments which are allowed to be tax exempt in Article 44 of
this law.
Article 46:
Monthly Taxable Salary
The monthly taxable salary shall be determined
as follows:
-
Monthly taxable salary for a resident employee includes:
a. salary received from Cambodian sources;
b. salary received from foreign sources;
c. advance money, loan or installment made by the employer to
the employee which shall be added to the taxable salary of the
month in which they are paid out and shall be deducted from
salary in the month of any repayment made by the employee.
-
Based on the evidence of family situation, any resident employee
with:
a. minor dependent children at the time of tax payment is
allowed a reduction in the tax base of seventy-five thousand
Riels per each child per month,
b. spouse having only an occupation as housewife is allowed a
reduction in the tax base of seventy-five thousand Riels for one
person only per month.
-
For a non-resident taxpayer taxable salary includes salary from
Cambodian sources taxable according to the provisions of this
chapter.
Article 47:
Determination of the Monthly Tax of an Employee
For a resident employee the tax to be paid must be determined on the
monthly taxable salary and must be withheld by the employer
according to the progressive rates by trenches as follows:
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|
Taxable Parts of the Monthly Salary |
Tax
Rate |
|
From 0 to 500,000 Riels |
0% |
|
From 500,001 to 1,250,000 Riels |
5% |
|
From 1,250,001 to 8,500,000 Riels |
10% |
|
From 8,500,001 to 12,500,000 Riels |
15% |
|
Over 12,500,000 |
20% |
Article 48: The
Determination of the Tax on Fringe Benefits
For fringe benefits, every month, the employer shall withhold
and pay tax by the time specified at the rate of 20 percent of the
total value of fringe benefits given to all employees. The value of
fringe benefits is the fair market value inclusive of all taxes.
Article 49:
Determination of the Tax on Salary for a Non-Resident Taxpayer
Except for fringe benefits to be taxed under article 48 of this law,
for a non-resident taxpayer the tax shall be withheld by the payor
at the rate of 15 percent on every payment of taxable salary as
provided in paragraph 3 of article 46 of this law. This withholding
tax is the final tax on salary for the non-resident receiving the
salary.
Article 50: Foreign
Tax Credit
A resident taxpayer who has received foreign source salary and
who has paid taxes according to foreign tax law shall receive a tax
credit which for deduction from the tax on salary to be paid in the
Kingdom of Cambodia under the conditions that there is presentation
of documents confirming this payment abroad.
a. In order to calculate the tax to be paid in the Kingdom of
Cambodia before deduction of this tax credit, the total amount of
salaries received from Cambodian sources and foreign sources shall
be taken into account.
b. The tax credit is determined separately for the tax paid by a
Cambodian resident in each foreign country. But, the tax credit to
be allowed for the tax on salary paid abroad is the smaller of:
-
the tax amount actually paid in a foreign country, or
-
the amount obtained by multiplying the tax on total salaries
from all sources for the same period calculated according to the
table of progressive tax rates by tranche in article 47 of this
law with the ratio of salary received in that foreign country to
the total salaries from all sources.
The
refund of the foreign tax credit is possible only if the resident
taxpayer has complied with the formalities and supplied various
documents as specified by the tax administration especially the
certification from the employer and from the tax administration of
the place of employment abroad.
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Section 4: Obligations of Employers and
Employees
Article 51: Cause
of Tax Liability
The salary payment is the cause of the tax liability.
Article 52: Tax
Debt and the Obligation to Withhold
The tax debt and the obligation to withhold
shall be as follows:
-
This tax is the debt of the physical person receiving the
salary, including foreign physical persons, except for contrary
provisions as stated in international agreement.
-
The tax on salary shall be collected through monthly withholding
procedure by the employer at the time of each salary payment.
-
If the employer resides abroad, the fiscal representative
appointed in the Kingdom of Cambodia by the employer is the one
in charge of withholding the tax on salary prior to the salary
payment to employees and of transferring their taxes to the
State.
-
The employer or the resident representative in the Kingdom of
Cambodia of a foreign employer and the employee shall be jointly
responsible for the payment of the tax on salary in the Kingdom
of Cambodia regardless of whether the salary is paid in the
Kingdom of Cambodia or abroad. In the case where no withholding
is made on the tax on salary, the employer is held responsible
under this law even if the tax is already paid by the employee.
Article 53: Payment
of Tax Withheld
The withholding tax related to the salary payment made in any
one month shall be paid by the 15th of the following month to the
tax administration in the area of the domicile or principal
establishment of the person in charge of withholding the tax.
Article 54:
Tax Withholding, Record Keeping and Reporting Requirements
All employers who make taxable salary
payments shall be in charge of:
-
withholding tax prior to the salary payment;
-
reporting to the tax administration and the employee of the
status of the tax withheld;
-
keeping and maintaining books and records which shall be
determined by prakas of the Ministry of Economy and Finance.
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Chapter 3
Provisions for the Tax on Value Added
Section 1: General Provisions
Article 55: Charge
to Tax
From 1 January 1998 onward, shall be established a Tax on Value
Added on taxable supplies for the benefit of the State budget.
Article 56:
Definitions
For the purpose of the provisions of the
tax on value added:
-
The term “good” means tangible property other than land or
money.
-
The term “service” means the provisions of something of value
other than goods, land, or money.
-
The term “supply of a good” means the transfer of the right to
use or dispose of a good as the owner whether or not for
consideration. The supply of a service incidental to the supply
of a good shall be considered a supply of a good.
-
The term “supply of a service” means a supply that is not a
supply of a good or land or money which is made for
consideration. The supply of a good incidental to the supply of
a service shall be considered a supply of a service.
-
The term “person” means any person or group of persons engaged
in business and any other person who is related to the person.
-
The term “related” in relation to a person means:
a. a person who owns 20 percent of more in value or voting power
in equity interests in the person under consideration;
b. having common management or directors with the person;
c. a member of the family or spouse or a member of the family of
the spouse of the person;
d. purchasing 30 percent or more of the person’s total output in
any three consecutive month period.
-
The term “tax” in this chapter means the tax on value added.
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Article 57: Non
Taxable Supplies
Non taxable supplies are as follows:
-
Public postal service.
-
Hospital, clinic, medical, and dental services and the sale of
medical and dental goods incidental to the performance of such
services.
-
The service of transportation of passengers by a wholly state
owned public transportation system.
-
Insurance services.
-
Primary financial services which shall be determined by prakas
of the Ministry of Economy and Finance.
-
The importation of articles for personal use that are exempt
from customs duties and that are within the value level which
shall be determined by prakas of the Ministry of Economy and
Finance.
-
Non profit activities in the public interest that have been
recognized by the Minister of Economy and Finance.
Article 58:
Non Taxable Supplies for Diplomatic Missions and International
Organizations
Non taxable supplies for diplomatic
missions and international organizations shall be as follows:
-
The imports of goods for or by foreign diplomatic and consular
missions, international organizations and agencies of technical
cooperation of other governments for use in the exercise of
their official function shall be treated as non taxable
supplies. Non taxable supplies shall only be allowed on the
certification by the chief of mission to the Tax Department that
the goods are being imported for purpose of the use as above.
-
The import of goods for the personal use of the official
personnel of missions and organizations as stated in paragraph 1
of this article shall be treated as non taxable supplies only
for those items that are on an enumerated list which shall be
determined by prakas of the Ministry of Economy and Finance.
-
The non taxable supplies in this article shall be based on the
principle of reciprocity between governments concerned.
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Section 2: General Principles for the Tax
on Value Added
Article 59:
Taxable Person
The taxable person refers to any person subject to the real regime
system of taxation who makes a taxable supply as stated in article
60 of this law.
A person subject to the simplified regime system of taxation may
apply to be classified as a taxable person. The conditions and
procedures for this application shall be determined by prakas of the
Ministry of Economy and Finance.
For the purpose of this chapter, an employee shall not be treated as
a taxable person with respect to activities engaged in as an
employee.
Article 60: Taxable
Supply
Except for contrary provisions in this
chapter, the term “taxable supply” means:
-
the supply of goods or services by a taxable person in the
Kingdom of Cambodia;
-
the appropriation of goods for his own use by the taxable
person;
-
the making of a gift or supply at below cost of goods or
services by the taxable person;
-
the import of goods into the customs territory of the Kingdom of
Cambodia.
The
rules and procedures for the application of this article shall be
provided in sub-decree.
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Article 61: Taxable
Value
The taxable value shall be determined as
follows:
-
The taxable value for any supply shall be the price of the goods
or services the seller charged the purchaser. The taxable value
includes any charges for transportation and other items payable
to the seller with respect to the supply, including any specific
tax on certain merchandise and services but excluding the tax on
value added. Procedures for the adjustment of the taxable value
at the time of supply and after the time of supply shall be
determined by sub-decree.
-
When the payment for a taxable supply involves any consideration
other than money for the direct or indirect benefit of the
seller, this consideration shall be included in the taxable
value at its fair market value.
-
The taxable value for any imported good shall be the customs
value including insurance and freight plus any customs duties
and any specific tax on certain merchandise and services. If
there is no such adjusted customs value, the fair market value
shall be used.
-
If the taxable value of the goods or services supplied does not
represent the true value, the tax administration may determine a
value for such goods or services and such value shall be
presumed to be the correct value until proven otherwise to the
satisfaction of the tax administration.
-
The taxable value of used goods that the taxable person
regularly purchases from consumers for resale or sells on behalf
of other persons shall be the differential between the selling
price and the purchase price, or the commission from the sale of
those goods.
Article 62: Time
of Supply
The time of supply shall be determined as
follows:
-
The tax on value added becomes due and payable at the time of
supply.
-
The time of supply of goods and services shall be the time by
which the seller must issue the invoice or the time the seller
issues the invoice if that invoice is issued before the time it
must be issued by the seller.
-
A value added tax invoice must be issued within seven days after
the goods are shipped or services rendered or after payment if
payment occurs before the goods are shipped or services
rendered. If a shipment is not accompanied by an invoice, there
shall be attached a shipping document which has been properly
recorded in the shipping journal.
-
For the supply of goods or services which are made continuously
or which involve multiple payments, the time of supply shall be
determined by prakas of the Ministry of Economy and Finance.
-
In the case of the import of goods, the time of supply shall be
the time the importer files a declaration to the customs
administration according to the regulations in force.
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Article 63: Location
of Supply
The location of supply shall be determined as
follows:
-
The supply of a good takes place in the Kingdom of Cambodia if
the good is delivered in the Kingdom of Cambodia, whether that
delivery takes on the characteristic of a transfer of the right
to use or to dispose. In the case where the supply must include
transportation, the supply takes place in the Kingdom of
Cambodia if the good is in the Kingdom of Cambodia when the
transportation starts.
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The supply of a service takes place in the Kingdom of Cambodia
if the service is performed in the Kingdom of Cambodia, except
that:
a. the supply of a service in connection with immovable property
is deemed to take place where the property is located;
b. the supply of a service in connection with transport is
deemed to take place where the transport occurs.
-
Goods are imported into the Kingdom of Cambodia if they are
brought within the customs territory of the Kingdom of Cambodia.
Section 3: Tax Rate and the Calculation of Tax
Article 64: Tax
Rate
The tax rate shall be as follows:
-
The tax on value added shall be imposed at the tax rate of 10
percent on the taxable value of each taxable supply in the
Kingdom of Cambodia.
-
The tax on value added shall be imposed at the tax rate of 0
percent on the taxable value of each taxable supply of goods
exported from the Kingdom of Cambodia and of the taxable supply
of a service rendered outside of the Kingdom of Cambodia as
stated in article 63 of this law.
-
The tax administration may use a number of documents to certify
that export has in fact occurred including export certification
from the Customs Department, import documents from the country
of import, executed letters of credit, and payments received by
a domestic bank.
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Article 65: Input
Tax Credit and Non Taxable Supplies
The input tax credit and the non taxable
supplies shall be determined as follows:
-
The tax paid by a taxable person on goods and services for use
in the business which are supplied by another taxable person or
the tax paid by the taxable person as an importer on imported
goods or services for use in his own business shall become an
input tax credit deductible against the output tax. Input means
any goods or services purchased and output means any goods or
services sold.
-
In the case where goods and services purchased are used partly
for taxable supplies and partly for non taxable supplies, the
tax credit shall be allowed only for that portion used for
taxable supplies.
Article 66: Determination
of Tax
The tax amount shall be determined as follows:
-
The tax charged under article 64 of this law shall become a debt
to the State at the time of supply.
-
The tax to be paid to the State is equal to the total output tax
according to the rates in article 64 of this law minus the total
input tax credit allowed for the same month.
Article 67:
Capital Assets that Cease to be Used in the Business
If a capital asset for which a tax credit has been received under
article 65 of this law ceases to be used in the business of the
taxable person, such asset shall be treated as sold and taxable for
its then fair market value at the time of cessation of use.
Article 68:Necessary
Documentation to Claim an Input Tax Credit
The request for an input tax credit shall be
attached with:
-
a value added tax invoice, drawn up in accordance with article
78 of this law,
-
a customs Bill of Entry for Import, certified by customs
authorities, which must state the name of the taxable person as
consignee or importer and the amount of tax paid at the time of
import.
Article 69: Input
Tax Not Allowed as a Tax Credit
The input tax that shall not be allowed as a tax credit includes
the tax paid by a taxable person on entertainment, amusement, or
recreation expenses; the purchase of automobiles; or the purchase of
certain petroleum product
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