The tax regime in Cambodia is a real/self-declaration regime, meaning the taxpayers are required to understand and fulfil the tax obligations by themselves. Returns will be checked through a tax audit by the General Department of Taxation (GDT) to verify their tax compliance fulfilment after that.
A taxpayer is required to register with the GDT within 15 working days from business commencement if meeting the registration threshold (e.g. a sole proprietorship having an estimated annual turnover of KHR250 million (~US$61,728) to KHR700 million (US$~172,840) is required to register as a small taxpayer). However, some taxpayers may not be aware of this tax registration obligation, so the GDT, in practice, will conduct a site visit to collect the estimated turnover information to consider if a taxpayer should be registered.
In addition, it may also be the case that if the size of the premise of a taxpayer is large (e.g. five story-building), the GDT may also require registration on the basis the GDT believes that such premise will meet the registration threshold, which is technically debatable. It is understood that such site visit has not been conducted on all taxpayers but selected taxpayers assessed by the GDT.
Therefore, to strengthen the tax registration, the GDT has issued Instruction no. 16403 dated 19 July 2022 on the Survey of an Enterprise in Phnom Penh mainly to ensure that a taxpayer that meets the registration requirement will be registered. As noted in the Instruction no. 16403, the following documents are required during the survey:
An enterprise that has already been registered with the GDT:
An enterprise that has yet to be registered with the GDT:
It is understood that the Tax Branch will conduct this survey and will be first started from Khan Toul Kork Tax Branch.
For an enterprise that has yet been registered with the GDT, we would like to inform you that in addition to the above required documents, there will be turnover information (last year and current year) that will be asked during the survey, so it may create material tax issue for you if your enterprise’s turnover meets the registration threshold. If it is the case, will your enterprise be penalised on the transactions incurred for prior periods? We would think that it is likely the case. Therefore, we would strongly recommend that you review your enterprise’s status in order to consider necessary action in a timely manner if your enterprise meets the tax registration requirement.
For an enterprise that has already been registered with the GDT, there should not be any tax concerns generally for this survey unless you have failed to update enterprise information changes (e.g. change of address, shareholder, or enterprise’s name etc…) that is required to be notified to the GDT. Therefore, we would suggest you to review changes, if any, that are required to be notified to the GDT has been done.
Please refer to the Prakas no. 701 dated 14 August 2020 for the details of tax registration and tax update which is available on the GDT’s website.
Should you require further clarification or wish to discuss the above matters in more details, please do not hesitate to contact us.
Mr. Seng Pov
Head of Tax
m.+855 (0) 12 53 34 32
t.+855 (0) 23 21 59 60