Unlike several countries that are free to choose their own financial year, the financial year in Cambodia is the same as the calendar year. However, companies may be able to change the year-end date in certain circumstances. This guide provides a brief introduction to the financial year in Cambodia.
What is the financial year-end?
A financial year-end is a period of 12 months that identifies the beginning and end of the company’s accounting period and is when companies should prepare their financial statements.
Determining the financial year-end
The financial year for all registered companies in Cambodia coincides with the calendar year, i.e., from 1 January to 31 December.
Where a company is incorporated mid-way through a year, its first financial period shall be from the incorporation date to 31 December in that year.
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Changing the financial year-end
In certain situations, it is possible to apply for a change in the standard year-end.
A registered company with 51% or more foreign ownership shall be allowed to request a different financial year-end from the calendar year by submission of an administrative application in Khmer for approval by the General Department of Taxation (GDT).
According to Prakas number 1481 dated 31 December 2007 issued by the Ministry of Economy and Finance (MEF), the required documents/information to be attached with the application letter to the GDT are as follows:
- Certification from the offshore parent company confirming its financial year-end.
- Certification from the independent auditor of the offshore parent company confirming its financial year-end. If the offshore parent company does not have an auditor, we recommend that the parent company to provide a letter advising that they do not have an independent auditor.
- Copy of the company’s Memorandum and Article of Association that states the name of its offshore parent company.
The financial year in Cambodia falls on 1 January and ends on 31 December. If your company has 51% or more foreign ownership, you will be allowed to change the financial year-end. Acclime can assist you in preparing and lodging a request application for approval to change your company’s tax year and other tax-related matters. Please contact us if you require assistance.
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