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The Cambodian public securities sector has been at its early development stage. To help with its growth, the General Department of Taxation (GDT) has been working on creating policies to promote the sector. After two previous attempts in 2011 and 2015, the GDT has published a new Sub-Decree 01 ANKr.BK dated 4th January 2019 which offers more attractive favorable tax incentives towards entities having their stocks and debt securities listed on the Cambodian Stock Exchange (CSX), as well as to resident and non-resident investors.
According to the Sub-Decree, qualified entities are entitled to 50% reduction on the Annual Tax on Income rate of 20% for three tax years with different commencement year based on the applicable conditions.
Entities having their stocks and debt securities listed on the CSX, are also entitled to have their historical tax liabilities of the past ten years waived, However certain number of years are still subject to tax audit by the GDT.
(i) Public listed companies which has fulfilled the requirements to register on the Main Board of CSX shall have their initial two historical years of tax liability undergo the tax re-assessment;
(ii) while the number of historical tax years liability for SMEs qualified to register on the Growth Board, is set to be one
The tax liabilities covered under these aforementioned incentives are: Tax on Income, Withholding Tax, Value Added Tax, Specific Tax, Accommodation Tax, and Public Lighting Tax.
Resident and non-resident investors are eligible to three years of 50% reduction of Withholding Tax that applies on interest payment, dividends derived from the holding and trading of government stocks and debt securities. It is important to note that, all the above-mentioned tax incentives are valid from the effective date of the Sub-Decree.
The Release of e-Tax Service
Apart from the concessional tax incentives established for the public securities sector, the GDT has taken a big leap-forward in terms of the tax system improvement with the objective of shifting towards more electronic based system in the near future. An online tax filing system called “e-Tax Service” has been introduced in the early of 2019. The newly released system was designed to ease the tax compliance processes of taxpayers, strengthen the effectiveness, efficiency, and transparency of the management of tax collection.
So far, it includes four main features which enables taxpayers to perform the following activities online via the GDT’s official webpage:
- settling tax bills and generating tax payment receipts;
- online tax registrations;
- Double Tax Agreement (DTA) tax treaty application;
- and Value Added Tax (VAT) report submission and refund which currently is one of the most brought-up topics amongst taxpayers. Through the implementation of this system, the process and time taken for the VAT refund is expected to be significantly reduced.
On top of the existing features, GDT is now in the process of developing the online tax filing system which is anticipated to be released in the near future.
