Cambodia legal and accounting and tax considerations in 2023
Healy Consultants Accounting Department assists our Clients to efficiently discharge their monthly and annual accounting and tax obligations.
- The standard corporate income tax rate in Cambodia is 20%. Oil and gas companies will be taxed at 30%, while insurance companies are only taxed at 5%;
- Tax holidays between 3-9 years are available to Qualified Investment Projects (QIP);
- The standard VAT rate in Cambodia is 10%. All companies must file their VAT returns monthly;
- All companies are subject to a prepayment tax of 1% on their monthly income;
- All resident companies pay tax at 20% on their annual capital gains;
- Businesses can carry forward their operating losses for up to five years;
- Withholding tax of flat 14% is levied on payments to non-residents, including: i) dividends; ii) interest and iii) royalties. However, dividends to resident companies are 100% withholding tax exempt. Unfortunately, Cambodia has not signed any double tax treaties, therefore withholding tax cannot be reduced;
- All resident companies must file their annual tax returns by the 31st of March. Late tax payments will result in 2% monthly interest on unpaid taxes;
- Companies with more than 8 employees are required to pay social security tax of 0.8% on the employee’s average monthly salary;
- Personal income tax is progressive in nature and ranges between 0% – 20%;
- Healy Consultants assists Our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparing financial accounting records and iv) preparing forecasts budgets and performing sensitivity analysis;
- It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
Legal and compliance
Healy Consultants Compliance Department helps our Clients through the process of fulfilling all annual legal and tax obligations.
- A private LLC requires at least one director and two shareholders, who can be of any nationality, Furthermore, the minimum paid up capital for an LLC registration is US$1,000;
- Foreign companies are not permitted to own land in Cambodia. However, they can rent land for up to 100 years or gain control over a landholding company;
- All companies must file 4 separate returns by the 15th of each month for i) salary tax ii) withholding tax iii) prepayment of tax on profit and iv) specific tax on certain merchandise and services;
- Financial statements of a Cambodian company must be audited by an independent auditor if the tax payer is a QIP or if two of the following cases are met: i) annual turnover exceeds US $750,000 ii) total assets exceed US $500,000 or iii) number of employees exceed 100;
- Audited financial statements must be completed within six months of the end of the fiscal year. However, there is no deadline for submitting them to the Government;
- Companies are required to register and obtain Tax identification Number (TIN) within 15 days after incorporation;
- In addition, all Cambodian company are required to register and obtain Patent & VAT Certificates from General Department of Taxation immediately after incorporation.
- All Cambodia resident companies must hold at least one annual general meeting (AGM) each year;
- Employers in Cambodia must file application with the Government by the end of November if they wish to employ foreign workers. Please note there is only ten percent quota for foreign workers;
- Firms must adhere to the Anti-money Laundering Law in Cambodia, which outline customer due diligence when dealing with foreign Clients;
- All QIP’s are required to obtain Certificate of Compliance from the CDC if they wish to receive annual tax incentives.