Skip to main content

Official exchange rate usage for a real regime taxpayer: Updated.

Written on . Posted in .

The Cambodian government issued Instruction no. 26118.GDT on 28 October 2022 addressing the official exchange rate.

Previously, the taxpayers were required to use the exchange rates issued by the National Bank of Cambodia (NBC) to convert amounts in US$ to KHR on their invoices. However, the exchange rates issued by the NBC did not accurately reflect the market rate, so in many cases, taxpayers lost on exchange rate movements when receiving payment in KHR. To avoid such losses, some taxpayers have not allowed their clients to make payments in KHR.

To address this issue, the General Department of Taxation (GDT) has issued its own exchange rates for tax purposes based on the Instruction no. 10360 GDT dated 17 May 2022.

Subsequently, NBC changed its official exchange rate determination which now reflects the actual market rate. So, as outlined in Instruction no. 26118.GDT dated 28 October 2022, the GDT decided to re-use the exchange rate issued by the NBC to convert amounts in US$ to KHR in invoices.

The exchange rate usage in this Instruction no. 26118.GDT is the same as Instruction no. 10360. We have summarised key points for official exchange rate usage in the below table.

No.Official exchange ratesUsageRemark
1.Daily exchange rate or the market exchange rate (the market exchange rate should NOT be lower than rates issued by the NBC)Daily supplyIf it is fallen on a day off or before the official exchange rate is issued, use the exchange rate issued one day before the day-off
2.15th of the monthSalary and Fringe Benefit ItemsIf it is fallen on a day off, use the exchange rate issued one day before the day off.
3.End of monthInvoices from a non-resident or non-real regime resident persons
4End of yearAnnual Tax on Income

This Instruction no. 26118.GDT is effective from the signature date onwards, 28 October 2022 and the Instruction no. 10362 GDT dated 17 May 2022 is nullified.

Our comments

  • To re-use the exchange rate issued by the NBC is effective from 28 October 2022 onwards, then how should the exchange rates for October 2022 monthly tax returns be used? We would think that exchange rate for “Salary and Fringe Benefit” items should follow the rate (15 October 2022) issued by the GDT. For all other tax items apart from Tax on Salary and Fringe Benefits Tax, the average exchange rate (31 October 2022) should follow the rate issued by the NBC.
  • To avoid loss on exchange rate movement, as indicated above, some taxpayers may not allow their client to make payment in KHR. The additional tax provision to allow a taxpayer to use market exchange rate, which is not lower than rate issued by the NBC, provides flexibility for a taxpayer to avoid loss from exchange rate movement. However, it is subject to further clarification with the GDT which market rate (1USD=4,200KHR?) is acceptable by the GDT? We will provide you further update on this matter separately if needed.
  • We have experienced in practice that the GDT allows some taxpayers to use the last day of the last month’s exchange rate as the rate for the whole of next month. If the exchange rate does not impact much on your Entity, for ease of invoice issuance, you may consider a request to the GDT to use the last day of the last month’s exchange rate as the rate for the whole next month.

Contact our teams for expert support and further information about accounting & tax requirements in Cambodia to ensure you are compliant in the market.

Hugh Darwell, Director, Business Development, h.darwell@acclime.com
Seng Pov, Head of Tax, s.pov@acclime.comm

Official exchange rate usage for a real regime taxpayer: Updated

About Acclime Cambodia.

Acclime Cambodia helps established multinational companies and startups start and operate their business in Cambodia and the region. By seamlessly navigating our clients through the complexities of Cambodian laws and bureaucracy, we allow them to reclaim valuable time and fully focus on growing and developing their business.