Value-added tax (VAT) in Cambodia.

Cambodia’s value-added tax (VAT) system forms an important part of the country’s tax framework, applying to the supply of most goods and services. Businesses operating in Cambodia are generally required to register for VAT and follow a number of compliance obligations to remain in good standing with the tax authorities. While the system is broadly in line with international standards, certain procedures, such as claiming VAT refunds, can be complex and time-consuming.

This article provides an overview of how VAT works in Cambodia and what businesses should be aware of when managing their VAT obligations.

What is VAT?

Value-added tax (VAT) is a tax that is added to the price of goods or services provided by a company.

VAT rates in Cambodia

The supply of goods and services in Cambodia is subject to the standard VAT rate of 10%.

The zero-rate applies to the following goods and services:

• Goods and services supplied by Supporting Industry Qualified Investment Projects (QIPs)
• Services performed within Cambodia but used outside of Cambodia directly or entirely by a non-resident entity
• Services performed outside of Cambodia or used outside of Cambodia for a non-resident entity
• Domestic supplies of paddy rice
• Domestic supplies of milled rice or milled rice production services by contractors to the rice exporters
• Domestic supplies of specific agricultural products, including all types of fertilisers, plant seeds, animal medicine, animal food, animal species and agricultural machinery and tools
• Cut, Make and Trim (CMT) services
• Supply of international transportation services
• Supporting industries that supply export-oriented garments, textile and footwear industries.

How to claim zero-rated VAT

In order to claim 0% VAT, the taxpayer must provide the following documents:

• An agreement clearly specifying the service charge, type of service and the location where the services are performed
• Documents showing payments remitted from outside of Cambodia to a bank in Cambodia
• An original invoice
• Valid accounting records

Goods and services that are exempted from VAT include:

• Public postal services
• Medical and dental goods and services
• Wholly state-owned public transportation services
• Insurance services
• Primary financial services, which profit is from deposit, credit or loan transactions, initial public offerings of stock, trading of stock, currency exchange or trading of gold
• Educational services
• Non-profit activities recognised by the Ministry of Economy and Finance
• Unprocessed agricultural products
• Supply of water and electricity
• Solid and liquid waste collection services

VAT on the disposal of fixed assets

Instruction No. 12093, issued by the General Department of Taxation (GDT) on 7 June 2022, is a supplement to the existing guidelines outlined in Instruction No. 15301, dated 22 June 2020, concerning the VAT treatment of fixed assets that are no longer used in business operations.

According to Instruction No. 12093, a tangible fixed asset ceased to be used refers to any tangible asset owned by an enterprise that has not been utilised in the business for a period exceeding one year.

Fixed assets are categorised into four categories based on their nature:

Who must register for VAT in Cambodia?

Companies that provide taxable goods and services must register for VAT if they meet one of the following conditions:

• Is a taxpayer with a taxable turnover of goods sold exceeding KHR 125 million for the preceding three consecutive months or is likely to exceed this in the next three consecutive months
• Is a company, importer, exporter or an investment company
• Is a taxpayer with a taxable turnover of services provided exceeding KHR 60 million for the preceding three consecutive months or likely to exceed this in the next three months
• Is a taxpayer with government contracts with a total taxable turnover of more than KHR 30 million

VAT registration must be made at the beginning of the business operations or within 30 days which the taxpayer becomes a taxable person.

Are foreign companies required to register for VAT in Cambodia?

Foreign companies can only register for VAT if they have an official presence in Cambodia, such as foreign companies that have registered with the Ministry of Commerce in the form of a foreign branch.

When to file VAT returns in Cambodia?

VAT returns and payments must be filed and paid to the GDT by the 20th of the following month in which the VAT was charged on the invoice.

Payments should be made in cash or cheque to the local bank in Cambodia, and the payment must be in Cambodian Riel.

What is included in the VAT return?

The following must be included in the VAT return:

• Company name
• Input VAT brought forward
• Input VAT carried forward
• Monthly creditable and non-creditable purchases
• Monthly taxable and non-taxable sales
• Output VAT
• Period of the VAT return
• Refund

VAT refunds

Who can apply for VAT refunds?

Only medium and large taxpayers are eligible to request a VAT refund.

Small taxpayers will only have up to 80% of the VAT input credits to its VAT output on sales.

The following table determines whether a company is a small, medium or large taxpayer:

Medium and large taxpayers’ criteria

The criteria for requesting a VAT refund for medium and large taxpayers are:

• Taxpayers whose primary activities involve exports or who are registered as Qualified Investment Projects (QIPs) can request a VAT refund when their monthly input VAT exceeds output VAT.
• Other medium and large taxpayers are eligible to request a VAT refund if they have accumulated excess input VAT credits for three or more consecutive months.
• To receive a VAT refund within the standard processing timeframes (40 business days for companies, 15 business days for not-for-profit entities), taxpayers should submit their refund requests within three to six months, but no later than one year, to prevent the accumulation of input VAT credits over multiple years.
• Taxpayers must maintain valid VAT accounting records, including sales and purchase journals, and other supporting documents.
• Proof of input VAT, such as original tax invoices
• For exporters, evidence of exported goods and services subjected to zero-rated VAT must be provided
• As of 2025, all entities seeking VAT refunds must maintain a Khmer Riel (KHR) bank account registered with the GDT for refund settlements

Procedures for VAT refund

The following is the process to request a VAT refund:

• The taxpayer submits the request letter and application form to the GDT, which the GDT will enter the request letter and application form into a document tracking system. This will generate a bar code in order to track the status.
• The GDT will conduct a VAT audit. Companies with the gold status are exempt from VAT audits.
• The GDT will then obtain approval for the refund from the Ministry of Economy and Finance and the General Department of National Treasury.
• Upon approval, the GDT will issue a response letter to the taxpayer together with a refund check.

It may take approximately 40 working days for the GDT to issue a refund check after receiving the VAT refund request.

How to obtain gold status?

The gold status is a classification of the taxpayer’s compliance. According to Article 4 of the Prakas on classification of taxes-compliance, there are three types of classifications: gold (highly compliant), silver (moderately compliant) and bronze (slightly compliant), and the level of classification will depend on the total scores of the following criteria:

Taxpayers will be classified as gold, silver or bronze based on the following scores:

• Gold compliance taxpayers (16 to 20) receive a tax compliance certificate valid for two years and may request VAT refunds below KHR 500 million (approx. USD 125,000) without being subject to a VAT audit.
• Silver compliance taxpayers (11 to 15) also receive a two-year tax compliance certificate and are allowed to request VAT refunds below KHR 200 million (approx. USD 50,000) without undergoing a VAT audit.
• Bronze compliance taxpayers (1 to 10) are issued a tax compliance certificate valid for two years but are not exempt from VAT audits when requesting refunds.

Tax obligations for e-commerce and digital services

Sub-Decree No. 65 and Prakas No. 542 regulate the supply of digital goods, digital services or any form of e-commerce activities provided by non-resident suppliers outside Cambodia to customers within the country, as well as the obligations of resident taxpayers who receive such supplies.

These regulations apply to two main categories of taxpayers:

• Non-resident taxpayers, which include suppliers of digital goods or services and e-commerce platforms operators* who do not have a permanent establishment (PE) in Cambodia but supply digital products or services to customers in the country** and meet the simplified VAT registration threshold.
• Self-assessment taxpayers in Cambodia, which refers to tax-registered customers who receive digital goods, services or engage in e-commerce transactions with non-resident suppliers.

* An electronic platform operator is a non-resident taxpayer who facilitates e-commerce transactions, processes payments, and delivers products or services on behalf of non-resident suppliers.

** Whether a digital service or e-commerce activity occurs in Cambodia is determined based on customer information such as payment details, billing addresses, SIM card codes and IP addresses.

The introduction of VAT on e-commerce in Cambodia ensures fair competition between local and non-resident suppliers by requiring a 10% VAT on digital goods and services sold by non-residents to Cambodian customers. VAT obligations under Prakas No. 542 took effect from 1 April 2022.

Definition of digital goods, services and e-commerce

Digital goods are intangible products ordered, delivered and consumed entirely via electronic systems, while digital services refer to services conducted through such systems.

E-commerce, as defined under Sub-Decree 65, includes the buying, selling, leasing and exchanging of goods or services through electronic means. This includes a broad range of online transactions such as ordering digital products, software licensing, data services, online auctions, web hosting and streaming content.

Simplified VAT registration threshold

The simplified VAT registration threshold applies to non-resident taxpayers with annual turnover from these supplies of at least KHR 250 million (approximately USD 62,500) or a three-month cumulative turnover of at least KHR 60 million (approximately USD 15,000).

Registration must be completed within 30 days of meeting these thresholds. However, non-resident taxpayers may voluntarily register even if their turnover does not meet the requirement.

Conclusion

Cambodia’s VAT system is a central component of the country’s tax framework, with wide application across the supply of goods and services. While the standard rate is 10%, various exemptions and zero-rated categories reflect the government’s efforts to support key sectors such as agriculture, exports and investment. Businesses operating in Cambodia must pay close attention to VAT registration thresholds, ongoing filing obligations and the documentary requirements for claiming refunds or preferential rates.

Whether a foreign investor, a digital service provider or a domestic enterprise, businesses should stay informed and manage VAT obligations proactively to avoid penalties and maximise potential refunds. Professional support may help navigate the system more efficiently.

How Acclime can help businesses comply with VAT obligations

Our local experts can support you with VAT registration, timely return filings, input VAT credit claims and liaising with the GDT on your behalf. We stay up to date with regulatory changes to ensure your business remains compliant and avoids penalties, while also helping you identify opportunities to improve your tax efficiency. Feel free to reach out to Acclime if you have any queries on VAT in Cambodia or need assistance with your monthly compliance.