A tax rate of 30% applies to income derived from oil or natural gas production sharing contracts and from the exploitation of natural resources including timber, ore, gold and precious stones.
A tax rate of 5% is imposed on the gross premium income of insurance companies providing insurance or reinsurance products for property or other risks. However, insurance companies providing life insurance or reinsurance in the form of a savings product are taxed at a rate of 20%.
Minimum tax. Minimum tax is a separate annual tax imposed at a rate of 1% of annual turnover inclusive of all taxes, except valueadded tax (VAT). If the ToI liability exceeds the amount of the minimum tax, the taxpayer is not liable for the minimum tax. If taxpayers’ accounting records meet the criteria set by the tax authorities for the maintenance of proper accounting records, these taxpayers are exempt from the minimum tax.
Advance Income Tax on Dividend Distribution.
The Advance Income Tax on Dividend Distribution (AITDD) is imposed on the distribution of retained earnings to local and overseas shareholders before ToI is declared to the tax department. The AITDD is payable by the distributing company. It is calculated based on the following gross-up calculation of the annual ToI rate:
• Step 1: Divide the amount of the dividend by 0.8.
• Step 2: Apply a rate of 20% to the result of Step 1.
The AITDD becomes a tax credit to utilize against annual ToI. Any excess tax credit can be carried forward to offset against the annual ToI liability in the following year.
From 2020, dividends distributed by Qualified Investment Projects (QIPs) during the tax holiday period are exempt from AITDD.
Investment incentives. A QIP registered and approved by the Council for the Development of Cambodia is entitled to the incentives described below.
Based on the former Law on Investment (old LoI), an exemption from ToI applies to the trigger period and the priority period. The trigger period begins on the date of final registration and ends on the earlier of the end of the third year after the first revenue is earned or the end of the year preceding the year in which the first taxable income is earned. The priority period, which is specified in the Finance Law and varies by project, may have a duration of up to three years. Under the new Law on Investment (new LoI) issued in October 2021, ToI exemption shall be provided for three to nine years, depending on the sector and investment activities, from the time the first income is earned. Also, the new LoI further states that after the ToI exemption period ends, a QIP will continue to be entitled to a reduced ToI rate for six years. The reduced rates are 25% of the standard rate for the first two years, 50% of the standard rate for the next two years and 75% of the standard rate for the last two years.
The taxpayer is entitled to an exemption from the minimum tax if it is confirmed by the tax authorities that the taxpayer is maintaining proper accounting records. Under the new LoI, a QIP is exempt from minimum tax if its accounts are audited by an independent auditor.
QIPs can import construction materials, construction equipment, production equipment and production inputs with customs duty, Specific Tax and VAT borne by the government. However, the incentives of production inputs for domestically oriented QIPs are determined by the Law on Financial Management and/or a Sub-Decree.
Other incentives include a VAT exemption on the local purchase of production inputs, a deduction of 150% of expenses for certain expenses, an exemption from income tax for QIP expansion and additional special incentives for certain potential investments that will contribute to develop Cambodia’s economy. These additional incentives are determined by the Law on Financial Management and/or a Sub-Decree.
Capital gains. All realized gains (including capital gains) are considered to be taxable income. Prior to 1 January 2025, tax on capital gains is not separately imposed in Cambodia. Capital gains derived by a legal person from the disposal of fixed assets are treated as ordinary income and generally taxed at the standard ToI rate of 20%.
Administration. Resident taxpayers must file annual ToI or minimum tax returns within three months after the end of the tax year.
Resident taxpayers must make monthly prepayments of ToI, which are each equal to 1% of monthly turnover inclusive of all taxes, except VAT. The tax payments can be used to offset the annual ToI or minimum tax liability. Prepayments of ToI are not required during the period of exemption from ToI.
Effective from the December 2020 monthly tax return, the prepayments must be made by the 25th day of the following month in which the tax liability arose through an e-filing system. Hard-copy tax returns are accepted by 20th day of the following month if the taxpayer has received approval from the tax authorities to submit hard-copy tax returns as a result of difficulties in implementing the e-filing system.
Dividends. Dividends paid to nonresident taxpayers are subject to withholding tax at a rate of 14%.
Withholding taxes
Payments to resident taxpayers. Resident taxpayers carrying on business in Cambodia must withhold tax from payments made to other resident taxpayers at the following rates.
Payment Rate (%)
Interest paid to recipients other than domestic banks 15
Interest paid on non-fixed term saving accounts by domestic banks 4
Interest paid on fixed-term saving accounts by domestic banks 6 Royalties 15 (a)
Rent paid for movable and immovable property 10 (b)
Payments to individuals for services, including management, consulting and similar services 15 (c) (a) This withholding tax is not applied to payments made to registered resident taxpayers with valid value-added tax (VAT) invoices on shrink-wrap
• Loan agreement that clearly states the length and repayment terms
• Business plan or current and forecasted financial statements and supporting documents with respect to the purpose of borrowing and the explanation relating to the loan
• Board of directors’ resolution (for enterprises that are not single private limited companies)
In addition, deductions for interest are limited to interest income plus 50% of taxable income excluding interest income and expenses. Any disallowed interest may be carried forward and a deduction can be claimed in the subsequent five years, subject to the same limitations.
Provisions. Provisions for losses or expenses that have not occurred are not allowed for tax purposes even if the incurrence of such losses or expenses is probable. However, domestic financial institutions may establish provisions for bad debts within the threshold provided by the GDT.
Tax depreciation and amortization. The tax regulations divide fixed assets into four classes for purposes of depreciation and specify the depreciation methods and rates for the classes. The following are the classes.
Intangible assets with a limited useful life, such as patents, copyrights, drawings, models, and franchises, can be amortized over their useful life on a straight-line basis. If the life of intangible assets cannot be determined, the assets are amortized using the straight-line method at a rate of 10%.
A QIP (see Section B) may apply a special depreciation rate of 40% in the year of purchase or in the first year the tangible assets are placed into operation, if later. If the enterprise elects to use the exemption period for the ToI, the special depreciation rate does not apply.
Relief for losses. Losses can be carried forward to offset future taxable income for the following five years. The carryback of losses is not allowed.
The carryforward of losses is not forfeited by a change of ownership. However, it is required that there be no change in the business objectives and activities of the entity.
Groups of companies. Cambodia does not allow consolidated tax filing or provide other group tax relief.
D. Other significant taxes
Value-added tax. Resident taxpayers providing taxable supplies must register for VAT. Taxable supplies include supplies of goods or services by taxable persons in Cambodia.
Effective from 1 April 2022, legal persons that make payments to nonresident suppliers on supplies of digital goods or services to Cambodia are required to apply 10% reverse-charge VAT.
The standard rate of VAT is 10%. A 0% rate of VAT applies to exports of goods and services including international transportation of passengers and goods and services with respect to such transportation. It also applies to enterprises in supporting industries and subcontractors that supply certain goods and services to exporters.
The tax law specifies certain nontaxable supplies.
A resident taxpayer must complete the registration for VAT within 30 days after the date on which it becomes a taxable person. The filing of VAT returns and payment of VAT must be made by the 25th day of the following month, effective from December 2020. Hard-copy tax returns are accepted by 20th day of the following month if the taxpayer has received approval from the tax authorities to submit hard-copy tax returns as a result of difficulties in implementing the e-filing system.
Other taxes. Cambodia imposed various other taxes, including the following:
• Specific Tax on Certain Merchandises and Service
• Tax for Public Lighting
• Accommodation Tax
• Patent Tax
• Registration Tax (property transfer tax)
• Fiscal Stamp Tax
• Tax on Immovable Property
• Tax on Unused Land
• Tax on Means of Transportation
E. Foreign-exchange controls
The Cambodian currency is the Khmer riel (KHR). Cambodia does not impose any restrictions on the purchase of foreign currencies through authorized financial institutions.
From 28 October 2022, monthly and annual tax declarations must comply with the following exchange rates:
• Daily exchange rate: Taxpayers must use the daily official exchange rate issued by the National Bank of Cambodia (NBC) for the KHR on the total price on the invoice. If the NBC has not issued an official exchange rate for a particular day, a taxpayer must use the official exchange rate of the preceding day.
• Exchange rate for Tax on Salary (ToS)/Tax on Fringe Benefits (ToFB): Taxpayers must use the official exchange rate issued by the NBC on the 15th of each month for their ToS and ToFB calculation. If the NBC has not issued an official exchange rate