Law on Taxation

Chapter 1 | chapter 2 | chapter 3 | chapter 4 | chapter 5 | chapter 6

Section 4: Payment of Tax

Section 4: Tax Declarations

Article 104: Preparation and Submission of the Tax Declaration
The taxpayer or withholding agent must submit a tax declaration to the tax administration according to the form, the time and the place determined by the tax administration.
 
The tax declaration must be signed by the taxpayer or his legal representative.
 
Article 105: Preparation and Submission of the Information Declaration and other Documents
Any person who makes payments to another person must submit to the tax administration an information declaration about that payment in a manner as prescribed by the tax administration.
 
Article 106: The Taxpayer’s Representative

The person who is the representative of the taxpayer, must have on behalf of the taxpayer, the right to:
 

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• submit tax declarations;

• show reports and various correspondences;

• pay taxes as prescribed by the tax provisions;

• make protests and appeals;

• perform all obligations for which the taxpayer is held responsible under tax
  provisions.

The taxpayer can transfer rights in written form to another person to carry out activity on his behalf in matters related to taxes with the rights and obligation as stated in paragraph 1 of this article. The taxpayer can set limits on this transfer of right.
 
The tax administration can require the person who acts on behalf of the taxpayer on the basis of the transfer of right to submit evidence in written form of this transfer of right.
The taxpayer shall be directly responsible for every activity of the person who is his legal representative or of the person who has received the right transferred from him until the time when the tax administration receives the confirmation in written form from the taxpayer about the cancellation of that transfer of right.
The person who is the representative of the taxpayer shall register this relationship with the tax administration within 15 days from the date that the relationship was established.
 
Section 5: Collection of Taxes

Article 107: Payment of taxes
The payment of taxes shall be as follows:

• Tax is due and payable within the period of time that tax provisions require for the submission of a tax declaration.

• A tax debt is due and payable within 30 days after a letter of notification for tax collection is delivered.

• A tax debt is due and payable within 3 days after delivery of a letter of notification for tax collection as provided in paragraph 4 of article 116 of this law.

• The Minister of Economy and Finance shall establish by prakas rules and procedures by which:
  a. to schedule the collection of a tax debt to avoid the risk of a loss from non-collection;
  b. to consider a tax debt as a non-collectable tax. 

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Article 108: Liability of Directors, Managers, or Owners
If the directors or managers or owners of an enterprise know or intentionally cause the enterprise not to declare or to under declare tax in violation of the tax provisions or not to pay withheld tax to the tax administration, those directors or managers or owners are personally liable for the taxes to be paid.

Section 6: Power of the Tax Administration in Tax Collection

Article 109: Rights on the Properties of Taxpayers
If any person who is obligated to pay tax as required by tax provisions, neglects or refuses to pay tax after a reminder letter of notification for tax collection is properly delivered the tax administration shall have a lien on that person’s properties in accordance with the tax debt. 
The lien on the taxpayer’s properties is born on the date the reminder letter of notification for tax collection is delivered to the taxpayer as stated in article 95 of this law. 
If various conditions of this article are correctly satisfied, the lien on the properties as stated in paragraph 1 will have validity and priority over all other liens existing before or after that lien on the taxpayer’s property. Any person can make a protest to the tax administration requesting the removal of the lien on his own property as stated in paragraph 1 of this article by alleging an error in imposing that right.
 
If the tax administration has determined that the imposition of the lien on that property was in error, the tax administration must issue a certificate confirming the removal of the lien on the property within 10 days after the determination together with a statement in the certificate that the imposition of the lien was erroneous.
 
Article 110: Reminder Letter of Notification for Tax Collection
The tax administration must send a reminder letter of notification for tax collection to the taxpayer at least 15 days before proceeding with any recovery measure.

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Article 111: Confiscation
The confiscation of the taxpayer’s properties shall be as follows:

1. If the taxpayer fails to pay the tax debt within 15 days after receiving the reminder letter of notification for tax collection, the tax administration can confiscate the taxpayer's properties to guarantee the payment of the tax debt as well as the expenses for the collection of the tax. For the purpose of this law the term “confiscation” means the confiscation by all means and the sale of the taxpayer’s properties by the tax administration but the confiscation of properties shall not exceed the tax debt and expenses for the collection of the tax debt.

2. The person holding or administering the taxpayer’s properties confiscated by the tax administration under paragraph 1 of this article can not return those properties to the taxpayer or use those properties to make various payments except for payments that tax administration has authorized.

3. The tax administration can implement the confiscation of the taxpayer’s properties which are held or administered by another person 15 days after notifying the person holding or administering the properties.

4. The person who is holding or administering such confiscated properties, must surrender those properties or pay taxes, additional taxes, interest, and expenses for the collection of taxes to the tax administration, except for such part of properties which are under the proceedings of liquidation of the business activity.

5. Any person who fails to surrender property, as stated in paragraph 4 of this article, is responsible in the amount of the value of those properties but not in excess of the amount which is the object of that confiscation.

6. Any person who has complied with the requirements in paragraph 2 and 4 of this article shall be released from any responsibility to the taxpayer or third persons on the property, tax amounts, or other obligations transferred to the tax administration.

7. If the tax administration has a sound basis to believe that the collection of taxes can suffer, the tax administration can require the taxpayer to pay tax immediately and if the taxpayer does not comply with this requirement can proceed with the immediate confiscation of the taxpayer’s properties.

8. Such personal property as determined by sub-decree is exempt from the confiscation.

9. The sale of the confiscated properties must be carried out by auction. Expenses incurred from this sale are the charge of the taxpayer. 

Article 112: Protection of the Taxpayer
The properties to be confiscated by this law must be confiscated, held, and accounted for only by the tax administration. Other institutions of the government by themselves cannot use this law to confiscate or to hold those properties. If there is sale of properties confiscated by this law, any part of the proceeds, which are in excess of the tax liability of the taxpayer under this law, must be returned to the owner of those properties.

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Article 113: The Freezing of Bank Accounts
The confiscation in article 111 of this law may include also the freezing of the taxpayer's account at the bank by the tax administration's letter of notification which goes into effect immediately upon delivery of that letter to the bank.
 
Under this notification for the freezing of bank accounts, the bank cannot open new accounts for this same taxpayer and cannot make payments from the accounts, except for the payments prescribed by the tax administration for settling the taxes to be paid, interest, and other additional taxes.
The frozen bank accounts can only be reopened with a letter of notification from tax administration.
 
The bank that does not comply with the letter of notification as described in paragraph 1 of this article, shall be responsible to the tax administration to the extent of the amounts in the taxpayer’s account at the time when the letter of notification is delivered. 

Article 114: Stopping Export-Import Operations
The confiscation in article 111 of this law may include stopping export-import operations. Stopping export-import operations means the distraint by the customs administration of imported goods to be sent to the taxpayer and the goods to be exported by the taxpayer, under a letter of notification from the tax administration which takes immediate effect upon delivery of that letter to the customs administration.
 
The tax administration can confiscate and sell the taxpayer’s goods which are distrained by the customs administration according to the conditions as stated in article 111 of this law. 
The release of export-import operation from the stopping shall be implemented under a letter of notification from the tax administration.
 
Goods distrained by the custom administration that do not belong to the taxpayer shall be released from this distraint with the approval from the tax administration.
 
Article 115: Order Nullifying Permit and License
The confiscation in article 111 of this law can include the issue of a letter of notification by the tax administration to the competent authorities requesting them to nullify various permits and licenses of the taxpayer to implement an activity.

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Section 7: Tax Assessment

Article 116: Assessment of Tax
The tax amount shall be assessed as follows:

1. In the case where the taxpayer’s tax is paid through the withholding method and the taxpayer does not have the obligation to make the tax declaration, the taxpayer’s assessment of tax shall be the assessment of the tax amount withheld in the calendar year.

2. In the case where the taxpayer or withholding agent has the obligation to submit a tax declaration, the taxpayer’s or withholding agent’s assessment of tax shall be the assessment of tax that the taxpayer or withholding agent has calculated on the tax declaration submitted to the tax administration.

3. In the case where the taxpayer or withholding agent has the obligation to submit a tax declaration but does not do so, does not maintain proper records of account or other documents as required, or does not provide the necessary information to the tax administration to properly determine tax, the taxpayer’s or withholding agent’s assessment of tax shall be the unilateral tax assessment made by the tax administration and delivered to the person. The unilateral tax assessment shall be based on: 
   a. information mentioned in various tax declarations or in other documents submitted by the taxpayer to the tax administration;
   b. information mentioned in an information declaration;
   c. other information received by the tax administration.

4. When there is a basis indicating that the collection of tax can suffer, the tax administration may assess tax on the taxpayer at any time.

Article 117: Tax Re-Assessment and Period of Tax Re-Assessment
The tax re-assessment and period of tax re-assessment shall be as follows:

1. In the case of a tax assessment based on paragraph 1 of article 116 of this law, the tax administration can re-assess the tax within three years following the calendar year in which the withholding took place.

2. In the case of a tax assessment based on paragraph 2 and 3 of article 116 of this law, the tax administration can re-assess the tax in one of the periods of time as below:
   a. within 3 years after the date the tax declaration was submitted; 
   b. within 10 years after the date the tax declaration was required to be submitted if there is evidence of the obstruction of the implementation of tax provisions;
   c. at anytime with the written consent of the taxpayer.

3. The taxpayer or withholding agent may request to amend a tax declaration within three years of the filing date of the tax declaration in paragraph 2 of article 116 of this law, on the basis of an error or an oversight made by the taxpayer in the original tax declaration. If the amended tax declaration results in a refund or credit of tax, the tax administration has the right to do a verification under established tax verification procedures.

4. The taxpayer or withholding agent can request the tax administration to amend a tax re-assessment within 3 years of the date the tax administration made the tax re-assessment on the basis of additional information that was not available to the taxpayer or the tax administration at the time of the tax re-assessment.

5. Where a taxpayer or withholding agent amends his own tax declaration or requests the tax administration to amend a tax re-assessment, the time limitations for tax re-assessment under paragraphs 1 and 2 of this article will apply from the date the amended tax declaration was submitted or from the date the tax administration amends the tax re-assessment.

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Article 118: Procedure for Tax Re-Assessment
The re-assessment shall proceed according to procedures as follows:

1. The tax administration shall provide a letter of notification for tax re-assessment to the taxpayer.

2. The taxpayer has 30 days to answer the tax re-assessment to the office of the Tax Department responsible for the tax re-assessment. Within that period, taxpayer can accept or dispute the tax re-assessment. The taxpayer shall be considered to have accepted the tax re-assessment if he fails to answer.

3. Where there is a dispute over the tax re-assessment, the taxpayer may file a protest with the Director of the Tax Department according to the procedures as stated article 120 of this law.

4. The office of the Tax Department responsible for the tax re-assessment shall forward the results of the tax re-assessment to the tax collection office within a period of 30 days after the issue of the letter of notification for tax re-assessment.

Article 119: Burden of proof
When the taxpayer fails to maintain sufficient documents or fails to provide sufficient information, the tax administration has the right to assess tax on the taxpayer on the basis of any precise information available to the tax administration. The burden of proof that the tax as determined by the tax administration is incorrect is on the taxpayer.
 
When there is clear difference between the taxable income or the income reported by the taxpayer and the purchase of assets or other things which make the taxpayer’s expenditure conspicuous, the tax administration has the right to assess tax on the basis of the estimated income appropriate for the amount of expenditures to buy the assets or other things that are conspicuous. The burden of proof that the tax as determined by the tax administration is incorrect is on the taxpayer.

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Section 8: Settlement of the Taxpayer’s Protest

Article 120: Rules for Administrative Protests
The rules for the settlement of the taxpayer’s protest on tax issues shall be as follows:

1. A taxpayer who is not satisfied with the tax re-assessment or other decision made by the tax administration can file a protest with the Director of the Tax Department. The protest must be limited to facts or other information contained in the tax re-assessment or the decision or the procedures of the tax re-assessment.

2. The administrative protest must be made in writing according to the form as stated in the article 121 of this law, and must be submitted to the tax administration within 30 days after the day the taxpayer receives the letter of notification for tax collection from the tax administration.

3. The administrative protest does not relieve the taxpayer of any obligation to pay various taxes, additional taxes, and interest as specified in the letter of notification for tax collection.

Article 121: Contents of the Administrative Protest by the Taxpayer
An administrative protest can only be accepted if the letter of protest has the contents as below:

1. identification number of the taxpayer who makes the letter of protest, if available;

2. reference to the assessment, decision, or results which are the objects of the letter of protest;

3. facts or acts which are objects of the letter of protest;

4. reasons of the protest;

5. date and signature of the taxpayer and signature of the taxpayer’s authorized representative if necessary.

Article 122: Decision by the Tax Administration
The tax administration must issue a new decision within 60 days after the date the letter of protest is received to confirm the correctness or incorrectness, in whole or in part, of the tax assessment or other decision that the taxpayer disputes. The tax administration shall also state the basis of this decision.
 
If the taxpayer does not accept this new decision of the tax administration he can file a letter of protest to the Committee of Tax Arbitration within a period of 30 days.
 
Article 123: Committee of Tax Arbitration
The organization and functioning of the Committee of Tax Arbitration shall be determined by sub-decree upon proposition of the Minister of Economy and Finance.
 
Article 124: Appeal to the Court
The taxpayer has the right to appeal to the competent court against the decision of the Committee of Tax Arbitration within a period of 30 days after receiving notification of that decision.
 
The taxpayer must deposit in the national treasury an amount of money equal to the taxes, additional taxes, and interest under dispute and as assessed by the tax administration before filing the appeal to the court.

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Section 9: Violations of Tax Provisions

Article 125: Negligence
The taxpayer or withholding agent is considered negligent if the amount of tax paid is less than the amount of tax as determined by tax provisions by no more than 10 percent.
 
The taxpayer or withholding agent is considered negligent if they fail to file a tax declaration or to pay tax at the date required by law.
 
Article 126: Serious negligence
The taxpayer or withholding agent is considered seriously negligent if the amount of tax paid is less than the amount of tax as determined by tax provisions by more than 10 percent.
 
Article 127: Tax Evasion
Tax evasion is the willful, knowing, or systematic and repeated violation of tax provisions with the intention of reducing or eliminating the tax amount required by tax provisions to be paid.
 
Shall be considered also as tax evasion any serious negligence as stated in article 126 of this law which is committed on:

1. two separate occasions within a period of three calendar years;

2. three or more separate occasions in any period of time.

Article 128: Obstructing the Implementation of Tax Law
Obstructing the implementation of tax provisions includes: 

1. In the case where the person:
   a. fails to maintain proper records of account and other documentation or fails to issue invoices on transactions;
   b. fails to allow the tax administration access to records of account and other documents;
   c. fails to register with the tax administration;
   d. fails to notify the tax administration of any change in the registration as stated in this law;
   e. makes or furnishes fraudulent records, documents, reports, or other information;
   f. conceals or deliberately destroys accounting papers, records, documents, reports or other information;
   g. attempts to obstruct the assessment or the collection of taxes;
   h. fails to submit a nil tax declaration within 30 days of the date required by law;
   i. willfully supports any of the above acts.

2. In the case where an official of the government:
   a. discloses confidential information without authorization;
   b. attempts to obstruct the assessment and the collection of taxes;
   c. willfully supports any of the above acts.

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Article 129: Criminal violation of Tax Law
Without prejudice to other administrative penalties a person who has engaged in tax evasion activities as provided in article 127 of this law, or obstructed the administration of the tax system as provided in article 128 of this law shall have committed a criminal violation of tax provisions.

Section 10: Additional Tax

Article 130: Additional tax
Additional tax must be applied to violations of tax provisions.
 
The additional tax for the underpayment of tax or the late payment must be calculated separately from the additional tax for the obstruction of the implementation of tax provisions.
 
In the case of the underpayment of tax the additional tax and interest shall be due and payable in the same manner as the underpaid tax amount.
 
In any case, the implementation of additional tax shall not affect the implementation of penalties for criminal violation of tax provisions.

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Article 131: Additional Tax for Underpayment of Tax
To a person who is negligent, additional tax shall be 10 percent of the amount of the underpaid tax plus 2 percent interest on the amount of the underpaid tax for each month or part of a month that the amount of the underpaid tax is not paid.
 
To a person who is seriously negligent, additional tax shall be 25 percent of the amount of the underpaid tax plus 2 percent interest on the amount of the underpaid tax for each month or part of a month that the underpaid tax is not paid.

In the case of a unilateral tax assessment, additional tax shall be 40 percent of the amount of the underpaid tax plus 2 percent interest on the amount of the underpaid tax for each month or part of a month that the underpaid tax is not paid.
 
Interest shall not be applied during the period of tax re-assessment under article 118 of this law or within 30 days after delivery of the letter of notification for tax collection.
 
Article 132: Additional Tax for Late Tax Payment
To a person who fails to pay tax by the due date, additional tax shall be imposed at the rate of 10 percent of the amount of the late tax payment plus 2 percent interest on the amount of the late payment for each month or part of a month that the tax amount is not paid.
Where a person fails to pay tax within 15 days after receiving a reminder letter of notification for tax collection, additional tax shall be imposed at the rate of 25 percent of the amount of the late tax payment plus 2 percent interest on the amount of the late tax payment for each month or part of a month that the tax amount is not paid. In the case of a unilateral tax assessment for the non-submission of a tax declaration, additional tax shall be 40 percent of the amount of the tax assessed plus 2 percent interest on the amount of the tax assessed for each month or part of a month that the tax amount is not paid.
 
Late interest shall be calculated from the first day of the month following the month in which the tax must be paid. For the tax on profit the late interest shall be calculated from the first day of the following month for which the period for the filing of the declaration of the annual result has already expired.
 
The additional tax for the late payment of tax on means of transport shall be 100 percent of the tax that must be paid.
 
Article 133: Additional Tax for the Obstruction of the Implementation of Tax Law
For the obstruction of the implementation of tax provisions the additional tax shall be as below for each act:

1. two million riels for a person or a taxpayer or a withholding agent under the real regime system of taxation or a government official;

2. five-hundred thousand riels for a taxpayer or a withholding agent under the simplified or estimated regime system of taxation.

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Section 11: Criminal Violations

Article 134: Power to Sue for Criminal Charges
Except for violations stated in the articles 139 and 140 of this law, legal action to seek prosecution for criminal violations of tax provisions, shall be made by the Director of the Tax Department with the approval of the Minister of Economy and Finance.
 
Article 135: Tax Evasion
Without prejudice to any other penalties, a director or manager or owner of an enterprise or a person entrusted with a responsibility for an enterprise who commits an act of tax evasion as stated in article 127 of this law shall be liable to pay a fine from ten million riels to twenty million riels and to imprisonment from 1 year to 5 years or both.
 
Article 136: Obstruction of the Implementation of Tax
Without prejudice to any other penalties, any person who commits acts obstructing the implementation of tax provisions as stated in article 128 of this law shall be liable to a fine from five million riels to ten million riels and to imprisonment from 1 month to 1 year or both.
 
Article 137: Aiding or Abetting
Any person who deliberately aids or abets another person to commit criminal violations to this law, or deliberately advises or induces another person to commit such violation, shall be guilty and liable to the same penalty as if he has committed the violation himself.
 
Article 138: To reveal the Confidentiality
Without prejudice to any other penalties, any person who violates the article 94 of this law shall be guilty of violation of law and liable to a fine from five million riels to ten million riels and imprisonment from 1 month to 1 year or both.

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Article 139: Violations by the Tax Officials
Any person who has been assigned to implement tax provisions and who has deliberately committed act as below shall be guilty of a violation of the law and liable for a fine from five million riels to ten million riels or imprisonment from 1 month to 1 year or both:

1. withholding an amount of tax for his own use or for other uses not mentioned in the tax provisions;

2. submitting incorrect reports of the tax amount that he has collected or has received;

3. using his position as tax official to obtain money or other benefits from the taxpayer or other person;

4. collecting or attempting to collect tax without authorization.

Any person who has been assigned to implement tax provisions and who has deliberately requested an amount more than is allowed by law shall be punished for a violation of law according to the criminal law in force.
 
Any person who has been assigned to implement tax provisions and who has deliberately requested or accepted bribes shall be punished for bribe taking according to the criminal law in force. The person making the bribe shall be punished for offering bribes according to the criminal law in force.
 
Article 140: Compensation for Misconduct or Mistake
If the taxpayer believes that he has suffered financial loss or personal injury from the improper or illegal activities of the tax administration, the taxpayer can sue for compensation for those losses or injuries to court within three years following the date of the last financial loss or personal injury.