News on submission of annual financial statements and use of English in Cambodia.
In January 2022, Instruction 002 on the Submission of Annual Financial Statements to the Accounting and Auditing Regulator (ACAR) and Instruction 001 on the usage of English was introduced.
ACAR has announced that they will be enforcing the law requiring all enterprises in Cambodia to lodge their annual accounts with ACAR. The instruction is applicable for the 2021 year and the accounts must be lodged by 15th April 2022.
Further, all enterprises have an obligation to keep accounting records and prepare financial statements in accordance with the applicable standards and laws. ACAR will be undertaking inspection visits and intend to fine enterprises not in compliance with the law.
Further details of the announcement
According to the 2016 Law on Accounting and Auditing (Royal Kram No. NS/RKM 0416/006 dated 11 April 2016) and Sub-decree 79 (OrNKr.BK dated 01 June 2020) on the Penalties for Violations of Law on Accounting and Auditing, all enterprises must submit their audited financial reports to the Accounting and Auditing Regulator of Non-Banking Financial Services Authority.
Under Instruction 002 issued on 27 January 2022, enterprises including those that do not meet the criteria in Prakas 563 are obliged to submit audited financial statements to the ACAR from the 2021 accounting period onwards.
The enterprises affected by Instruction 002 must prepare their annual financial statements in accordance with the Accounting Standards and submit them to the ACAR within three months and 15 days from the day of closing their accounting period.
Enterprises are required to use the ACAR e-filing system to submit their financial statements and pay a public service fee in accordance with Prakas No. 001 BBFSA dated 12 January 2022 as follows:
- Enterprises that have an obligation to submit audited financial statements -KHR 300,000
- Enterprises that do not have an obligation to submit audited financial statements – KHR 200,000
- NGOs that have an obligation to submit financial statements – KHR 100,000
- NGOs that do not have an obligation to submit financial statements – KHR 60,000
Enterprises that fail to submit their annual statement within the deadline will be subject to penalties as prescribed in Sub-decree No. 79 dated 01 June 2020.
Introduction 001 was additionally issued regarding the use of the English language in computer accounting systems and other related computer accounting systems.
Circular 009 dated 01 September 2021 guides enterprises and not-for-profit organisations on the use of English in accounting systems and documents. Instruction 001 provides the following guidance:
- Registered enterprises are required to notify the ACAR of using English in computer accounting systems and/or other related accounting systems before 31 March 2022. Newly established enterprises are required to submit a notification on the usage of English in their computer accounting system and/or other accounting systems to the ACAR within 60 days from the date the enterprise was registered with the General Department of Taxation (GDT).
- Enterprises are required to submit the notification on using English in their computer accounting system and/or other computer systems via the ACAR e-filing system.
- Enterprises should follow these steps when submitting the notice to the ACAR:
- Step 1: Create an account in the e-filing system.
- Step 2: Complete the general information and save.
- Step 3: Click notice of the use of language, fill out any additional information and download the notification letter to fill out information regarding the use of language by indicating the system name, company name and country of origin and the language used in the accounting system, then upload the form via the e-filing system.
Enterprises should keep the original copy of the notification letter at their enterprise location for inspection by the ACAR.
Enterprises that used English in their accounting system and did not submit a notice to the ACAR within the deadline will be subject to a penalty under Sub-decree No. 79 dated 01 June 2020.
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