Cambodia has a single taxation regime, known as the “self-assessment regime”, a formalized system of taxation and incentives, with taxpayers being subject to audits.
The General Department of Taxation (“GDT”) classifies taxpayers into three categories, as follows:
Small taxpayers are sole proprietorships or partnerships that:
- Have annual turnover of from KHR250 million to KHR 1 billion (approx. US$62,500 to US$250,000) or annual total assets of from KHR200 million to KHR1 billion (approx. US$50,000 to US$250,000) for the agricultural, service, and trading sectors; or
- Have annual turnover of from KHR250 million to KHR1.6 billion (approx. US$62,500 to US$400,000) or annual total assets of from KHR200 million to KHR2 billion (approx. US$50,000 to US$500,000) for the industrial sector; or
- Have turnover for any three consecutive months of at least KHR60 million (US$15,000); or
- Expect to have total turnover in the next three consecutive months of at least KHR60 million (US$15,000); or
- Participate in any bidding or quotation for the supply of goods or services, including market stall management (Phasi).
Medium taxpayers are:
Entities that have annual turnover of:
- More than KHR1 billion to KHR4 billion (approx. US$250,000 to US$1 million) for the agricultural sector; or
- More than KHR1 billion to KHR6 billion (approx. US$250,000 to US$1.5 million) for the service and trading sectors; or
- More than KHR1.6 billion to KHR8 billion (approx. US$400,000 to US$2 million) for the industrial sector; or
Entities that have annual total assets of:
- From KHR1 billion to KHR2 billion (approx. US$250,000 to US$500,000) for the agricultural, service, and trading sectors; or
- From KHR2 billion to KHR4 billion (approx. US$500,000 to US$1 million) for the industrial sector; or
Entities that have been incorporated as a legal entity, representative office; or
- National and subnational government institutions, all types of organizations or associations, including non-governmental organizations; or
- Foreign consulates and embassies, international organizations, and technical cooperation agencies of other countries.
Large taxpayers are:
Entities that have annual turnover:
- Exceeding KHR4 billion (approx. US$1 million) for the agricultural sector; or
- Exceeding KHR6 billion (approx. US$1.5 million) for the service and trading sectors; or
- Exceeding KHR8 billion (approx. US$2 million) for the industrial sector; or
Entities that have annual total assets:
- Exceeding KHR2 million (approx. US$500,000) for the agricultural, service, and trading sectors; or
- Exceeding KHR4 billion (approx. US$1 million) for the industrial sector; or
- Branches of foreign companies or subsidiaries of multinational companies; or
- Entities registered as Qualified Investment Projects (“QIPs”).
Anyone falling within one of the above categories is required to begin the tax registration process within 15 working days of commencing business activities or incorporation. One of the main hurdles in registering for tax is the GDT’s requirement that one of the principals of the entity appear in person at the GDT at the time of registration.
A taxpayer’s classification will determine the amount of patent tax that must be paid. Additionally, small taxpayers have fewer requirements when it comes to recordkeeping. Small taxpayers are permitted to use a simplified accounting system, whereas medium and large taxpayers are expected to keep proper accounting records and books in line with Cambodian Accounting Standards
