DFDL Cambodia - Tax Plus

📢 On 20 November 2024, DFDL Cambodia had the distinct honor of hosting the Australian Chamber of Commerce (AusCham Cambodia) for their 2024 Annual General Meeting at our Phnom Penh office, located on the 16th floor of Exchange Square.
👏 We were delighted to warmly welcome Australia’s next Ambassador to the Kingdom of Cambodia, Mr. Derek Yip, and the members of the AusCham Cambodia's 2024 Committee.

🤝 As a premier sponsor of AusCham Cambodia, DFDL Cambodia is proud to contribute to the chamber’s initiatives and activities. Our long-standing partnership underscores our dedication to supporting its mission of promoting trade, investment, and collaboration across both nations.

We look forward to working closely with AusCham Cambodia throughout the year ahead, further strengthening our shared goals and contributing to the growth and success of the Australian-Cambodian business community.

Thank you to Casey and the CamEd team for putting this comprehensive English translation of the Law on Taxation together

In celebration of Cambodia’s Water Festival, DFDL Cambodia extends our warmest wishes to you and your family.

May this festive holiday bring you prosperity, good fortune, health, and safety. 🙏

#DFDL #Cambodia #WaterFestivalCelebration

Prakas 625 extends the voluntary disclosure amnesty for amendments prior to August 2024 to June 2025

Tax Incentives for Tourist Operators in Siem Reap

Special Tax Audit Unit - Head and Organization Structure Announced

Stay informed on Cambodia's latest business compliance standards at our upcoming event!

Participants will be informed about the key legal, tax and accounting compliance requirements that businesses operating in Cambodia need to complete for the 2024/2025 year as enforced by Cambodian Ministries and departments such as the Ministry of Commerce, Ministry of Labor and Vocation Training, General Department of Taxation and the Accounting and Auditing Regulator. Compliance obligations for businesses have increased significantly in recent years so this is a fantastic opportunity to keep up to date with recent changes and developments in Cambodia regarding annual compliance obligations.

📅 Date: November 26, 2024
🕒 Time: 08:00 am - 10:30 am (Registration opens at 8:00 am)
📍 Venue: Raintree Cambodia​
🎟 Tickets: Free for AmCham members, $15 for Non-members
Please register here: https://amchamcambodia.glueup.com/event/annual-compliance-obligations-legal-tax-and-accounting-breakfast-talk-125770/

Happy Independence Day, Cambodia! 🎉

On this historic day, DFDL Cambodia honors the remarkable legacy of the Late King-Father, His Majesty Norodom Sihanouk, "Preah Borom Ratanakoth," the Father of Cambodia's Independence. 🙏

We also pay tribute to the Royal Cambodian Armed Forces for their unwavering courage, sacrifices, and commitment to protecting the nation and its people. 💖

DFDL Cambodia was delighted to welcome clients to our Phnom Penh office for a Breakfast Talk on “Annual Compliance Obligations – Legal, Tax, and Accounting.”

On November 5 and 6, 2024, our experts—Vajiravann Chamnan, Tax Partner; Vattanakpagna Chhun, Senior Accounting Manager; and Raksa Chan, Senior Consultant—shared insights into annual compliance requirements.
Raksa Chan delivered an in-depth presentation on corporate and labor compliance, highlighting essential annual filings and key labor obligations. Vajiravann Chamnan provided a comprehensive overview of tax obligations, deadlines, and annual tax compliance requirements, while Vattanakpagna Chhun concluded the session with her insights on ACAR (Annual Compliance and Reporting), main obligations for enterprises and nonprofits, criteria for audited financial statements, and relevant fees.

DFDL Cambodia would like to extend our gratitude to all attendees for their active participation and thoughtful questions, which fostered engaging discussion.

Prakas 574 was enacted in September 2024 and provides key updates regarding transfer pricing compliance requirements in Cambodia.
Key Updates that will be discussed:

- New Transfer Pricing documentation requirements and exemptions
- Updates on related party loans
- Updates on Transfer Pricing adjustments
- Substance requirements for related party transactions
- Practical tips on tax audit updates for Transfer Pricing
- Updates on Permanent Establishment and income attribution

This session is ideal for professionals working in finance, tax, or compliance roles who need to stay updated on Cambodia's Transfer Pricing regulations. Don't miss this opportunity to understand Prakas 574 and its implications for your organization!

📅 Date: November 21, 2024
🕒 Time: 08:00 am - 10:30 am (Registration opens at 8:00 am)
📍 Venue: Raintree Cambodia
🎟 Free Entry

https://www.khmertimeskh.com/501583076/almost-100-of-tax-now-collected-electronically/

https://www.khmertimeskh.com/501581549/cambodia-qatar-accelerate-dta-negotiation-talks/

In celebration of the 20th anniversary of His Majesty King Norodom Sihamoni's ascension to the throne, we extend our heartfelt blessings for his health, long life, and continued prosperity.

May his reign over the Kingdom continue for many prosperous years ahead. 🙏

https://www.khmertimeskh.com/501577398/cambodian-business-owners-that-are-in-debt-may-be-eligible-to-apply-for-tax-repayment-in-installments/

A detailed analysis of the new Transfer Pricing regulation - Prakas 574 - for your reading pleasure. Prakas 574 provides at face-value generous concessions on the requirement for taxpayers to maintain contemporaneous transfer pricing documentation (TPD) with respect to their controlled transactions. However as always the devil is in the detail - taxpayers who are eligible for the general TPD exemption should note that adherence to the arms length principle still applies hence TPD may still be critical in a tax audit defense!

💡 Prakas 574 “On the Rules and Procedures for Income and Expense Allocation among Related Parties” was issued by the Ministry of Economy and Finance (MEF) on the 19 September 2024 (“Prakas 574”) and comes into effect on 1 January 2025.



📇 Read more here: https://www.dfdl.com/insights/legal-and-tax-updates/cambodia-new-transfer-pricing-prakas-explained/

Instruction No. 025 on October 10, 2024, from the General Department of Taxation regarding the supply of free goods and/or prizes by local enterprises (“Instruction 025”). Instruction 025 clarifies the tax treatment for free-of-charge (“FOC”) goods and rewards given to customers by local enterprises.

The salient points of Notification 025 are as follows:

1. Providing promotional items (FOC) from the Company's inventory:
- For Specific Tax (“SPT”) and Public Lighting Tax (“PLT”, at 5% for the initial supply by the manufacturer/importer), SPT will be calculated based on market value of taxable goods.
- For Value-Added Tax (“VAT”, at 10%) and Prepayment Tax on Income (“PTOI”, at 1%), the taxes will be calculated based on the cost of the goods.
- For Tax on Income (“TOI”), the tax will be calculated based on cost of the goods.
- Proper records and sufficient documents are required to substantiate the granting of these benefits.
Please note that before the issuance of Instruction 025, FOC goods were taxed based on their market value. However, effective from October 10, 2024, only Specific Tax and PLT will be calculated based on market value. Conversely, VAT, PTOI, and TOI will now be determined based on the cost of the goods.

2. Providing promotional items that do not include normal inventory (e.g. phones/cars and other rewards acquired specifically for marketing efforts)
- These goods are not considered a supply of goods subject to VAT, PTOI, and TOI.
- Taxpayers are not allowed to claim the VAT paid on the purchase of these goods or rewards as an input tax credit. However, the VAT will become a “deductible expense” for TOI computation;
- Proper recording and sufficient documents are required to substantiate the granting of these benefits.
Taxpayers must fulfill following requirements to carry out these promotional programs:

- Maintain proper procedure and internal documentation on these promotional programs, approved by the management with detailed criteria or conditions (quantity, price, other terms for sale transactions to qualify for the promotion, and specify the program’s duration including start and end dates for the purpose of market expansion.
- Generally applicable to customers in accordance with the terms and conditions for sale transactions to qualify for the promotion, and
- Publicly announced.
For monthly tax declaration purposes, taxpayers are required to input the FOC data in a separate form – “Tax Sale Voucher” which is included as a annex to the Instruction No.025.

Prakas 625 dated 10 October 2024 extends the amnesty period, under Prakas 071, for tax penalties, interest and administrative penalties with respect to taxpayer voluntarily disclosures. Under Prakas 625 a voluntary disclosure, that relates to a taxpayer position/omission taken prior to 1 August 2024, may be eligible for the amnesty provided that the disclosure is submitted to the GDT before 30 June 2025.

💡 Notification 014 MEF.N on the continuance and extension of tax incentives for the real estate sector was issued by the Ministry of Economy and Finance on the 9th of October 2024 (Notification 014).

📇 Read more here: https://lnkd.in/gVP3bMY9

Prakas 574 on the ‘rules and procedures on income and expense allocation among related parties’ was issued by Ministry of Economy and Finance on the 19 September 2024
The Prakas has some interesting updates particularly on exemptions for taxpayers regarding maintaining annual transfer pricing documentation in Cambodia.
4. For taxpayers who have prepared a transfer pricing report for the previous tax year, provided that the related party transactions and benchmarks and analysis remain the same for the current tax year the same report can be reused noting that the report will need to be updated to include the current years financial information.
5. Loan transactions with related parties will be exempted from the arm’s length principle in case the taxpayer maintains the documents as determined by the issued Instructions of the GDT (pls refer to Instruction 10979 issued in May 2022).
6. Resident taxpayers that are not banks or MFIs are exempted from the arm’s length principle for the loan from a related party and are not required to prepare TP document to determine the interest with related parties, however, the taxpayer must meet at least one of the conditions below:
- Be within the first three years of their tax registration, or
- Is a Single Member Private Limited Company that has loan(s) from a related party at any time that are less than KHR 3,000 million (USD750k), or
- Is a Sole Proprietorship who enters a loan transaction with the owner, spouse or children.
7. A taxpayer is exempted from the obligation of preparation of transfer pricing documents for any tax year in the event that the taxpayer meets all conditions below:
- Annual turnover less than KHR 8,000 million (USD2 million) and total assets less than KHR 4,000 million (USD 1 million); and
- Has related party transactions less than KHR 1,000 million (USD250K) for goods, services, royalties and other transactions apart from related party loans.

https://cambodiainvestmentreview.com/2024/10/09/ibc-private-sector-working-group-engages-cambodian-government-to-address-urgent-key-economic-challenges/

🙏 In celebration of the Pchum Ben Festival, DFDL Cambodia extends our warmest wishes for prosperity, good fortune, health, and safety to you and your loved ones.

💡 Instruction 33000 issued by the General Department of Taxation on the 18 of September 2024 provides that the rent-free period contained in a lease agreement may not exceed more than ten percent (10%) of the total lease term as stipulated in the lease agreement.

📇 Read more: https://www.dfdl.com/insights/legal-and-tax-updates/taxation-of-leases-clarified/

https://www.khmertimeskh.com/501561894/gold-certificate-taxpayers-to-get-service-of-special-auditors/

📢 On September 18th, DFDL Cambodia's Tax Partner, Vajiravann Chamnan, was honored to be an expert speaker at the Tax Forum 2024, co-organized by EuroCham Cambodia and AmCham Cambodia, held at the Sofitel Phnom Penh Phokeethra.

As a leading tax expert, Ms. Vajiravann provided valuable insights into the tax implications of share transfers and the impact of Double Tax Agreements (DTA). She discussed the intricacies of deal structures for share transfers, tax implications, and notification requirements. Additionally, she highlighted Instruction 180, dated January 3, 2024, regarding the tax elimination under the DTA, among other crucial topics.
The forum was presided over by H.E. Kong Vibol, Minister attached to the Prime Minister and Director-General of the General Department of Taxation.

👏 We extend our sincere gratitude to EuroCham Cambodia and AmCham Cambodia for inviting Ms. Vajiravann and congratulate them on a remarkable turnout and a successful event!

🏆 DFDL is proud to maintain its position as a leading law firm in the ASEAN region, earning top rankings in 17 practice areas and industry sectors in the recent Asialaw’s 2024 rankings.

Congratulations to our partners below:
🔹 Chris Robinson – Elite Practitioner, Cambodia
🔹 Clint O'Connell – Distinguished Practitioner, Cambodia
🔹 Guillaume Massin – Distinguished Practitioner, Cambodia
🔹 Vansok Khem – Notable Practitioner, Cambodia
🔹 Seka HEP – Notable Practitioner, Cambodia
🔹 Vinay Ahuja – Distinguished Practitioner, Indonesia
🔹 Kristy Newby – Elite Practitioner, Lao PDR
🔹 Standre Bezuidenhout – Rising Star, Lao PDR
🔹 Jerome Buzenet – Elite Practitioner, Vietnam
🔹 Phong Anh Hoang – Distinguished Practitioner, Vietnam
🔹 Martin Desautels – Notable Practitioner, Vietnam
🔹 Audray Souche – Distinguished Practitioner, Thailand
🔹 Walanchathas Sanguanwong – Rising Star, Thailand

👉 For the full rankings, click here: https://www.asialaw.com/NewsAndAnalysis/asialaw-2024-rankings-now-live/Index/2111