Understanding the corporate income tax system and other business-related taxes is key to operating a successful business in Cambodia. It is always recommended to seek the advice of tax professionals or legal counsel to fully understand the implications of these taxes on your business operations.
Corporate Income Tax
As of my knowledge cutoff in September 2021, the standard corporate income tax rate in Cambodia is 20% for general businesses, including trading companies and manufacturing companies. However, for oil, gas, and certain extractive industry operations, the tax rate increases to 30%. There is also a reduced rate of 9% for insurance companies offering life insurance.
The corporate income tax applies to resident and non-resident companies on their Cambodian-sourced income. Resident companies are those incorporated in Cambodia or those with management and control based in Cambodia. Non-resident companies are taxed only on the income earned within the country.
Value Added Tax (VAT)
In Cambodia, VAT is a broad-based tax assessed on the supply of most goods and services. It is also applicable on the importation of goods. The standard rate is 10%, with some exceptions.
Certain supplies, such as public postal services, healthcare and education services, and non-profit activities in the public interest, are exempt from VAT. Meanwhile, the export of goods and services is subjected to a zero rate VAT.
General Sales Tax (GST)
As of September 2021, Cambodia does not have a General Sales Tax (GST) system separate from its Value Added Tax (VAT) system. All goods and services are subject to the standard 10% VAT as mentioned above, with certain exceptions.
Withholding Tax: Cambodia imposes withholding tax on certain types of payments made to both residents and non-residents. These include interest (15%), royalties for intangible properties (15%), royalties for movable properties (10%), and payments for management and technical services (15%).
Import and Export Duties: Import duties vary from 0 to 35%, depending on the goods imported. Certain goods, like agricultural products, are exempt from import duties. As for export duties, these are imposed on a select few items, such as natural rubber, unprocessed wood, and fish.
Property Tax: The property tax rate in Cambodia is 0.1%, levied on immovable properties valued above KHR 100 million (approximately $25,000). This tax does not apply to state-owned properties and agricultural land.
Payroll Tax: Employers are required to withhold tax from an employee's salary at progressive rates ranging from 0% to 20%.
The General Department of Taxation (GDT) is the principal tax authority in Cambodia, responsible for overseeing all tax-related matters. The GDT operates under the purview of the Ministry of Economy and Finance. You can find more information on the General Department of Taxation on their website: http://www.tax.gov.kh/.