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Sohaib Ikram
Sohaib Ikram serves as the Director of Emerhub in Malaysia.
Doing your annual tax reporting is crucial for any business owner in Cambodia. However, this can be tricky, especially for foreigners since you need to file your financial reports and declarations in Khmer and in Riel. On top of that, you need to adhere to tax rules and deadlines which vary depending on tax type.
In this article, we’ll break down everything you need to know about tax compliance in Cambodia. From understanding how the government classifies small, medium, and large businesses to what tax responsibilities you’ll have. We’ll give you a simple, clear guide to help you navigate the system with confidence.
Understanding Cambodia’s Real Regime for Corporate Income Tax (CIT)
The standard CIT for corporations is 20% in Cambodia. However, you may have different compliance requirements based on your company’s annual turnover and value of assets. To assess the actual size of your business, the government has imposed the Real System in 2016 with the Law on Financial Management 2016 (Royal Kram No. NS/RK/1215/016).
The Real system classifies businesses into small, medium, and large which influence complexity of tax reporting. For example, if your business is classified as a small enterprise, you are subject to simplified accounting and tax reporting obligations. Meanwhile, if you are classified as a large organization, you are required to adhere to full tax compliance with standard accounting practices and detailed tax reporting.
Classification Based on Annual Turnover
Cambodia operates on a self-assessment under the Real system under Prakas 009 issued by the Ministry of Economy and Finance.
| Type of Business | Criteria Based on Annual Turnover |
| Small | Agriculture, commercial, or service sectors: KHR 250 million (~US$61,400) to KHR 1 billion (US$245,000) Industrial sector: KHR 250 million (~US$61,400) to KHR 1.6 billion (~US$393,000) Turnover or expected turnover of > KHR 60 million (~US$14,700) for 3 consecutive months per calendar year; or Participates in bidding, price consulting, or price surveying in supplying goods and services. |
| Medium | Agriculture: KHR 1 billion (~US$245,000) to KHR 4 billion (~US$983,000) Commercial and Service sectors: KHR 1 billion (~US$245,000) to KHR 6 billion (~US$1.4 million) Industrial sector: KHR 1.6 billion (~US$393,000) to KHR 8 billion (~US$1.9 million) Includes sole proprietorships, partnerships, legal entities within these turnover ranges |
| Large | Agriculture: > KHR 4 billion (~US$983,000) Commercial and service sectors: > KHR 6 billion (~US$1.4 million) Includes subsidiaries of multinational corporations and Qualified Investment Projects (QIP). |
Classification Based on Asset Value
If the declared turnover does not reflect actual business size or activity, the General Department of Taxation (GDT) can reclassify your business based on the value of your assets. This prevents underreporting and ensures that the actual economic scale of your company is taxed accordingly at the standard rate.
| Type of Business | Criteria Based on Value of Assets |
| Small | Commercial, service, and agricultural sectors: KHR 200 million (~US$49,000) to KHR 1 billion (~US$245,000)or Industrial sector: KHR 200 million (~US$49,000) to KHR 2 billion riel (~US$491,000) |
| Medium | Commercial, service, and agriculture sectors: KHR 1 billion (~US$245,000) to KHR 2 billion (~US$491,000) or Industrial sector: KHR 2 billion (~US$491,000) to KHR 4 billion (~US$983,000) |
| Large | Commercial, service, and agriculture: > KHR 2 billion (~US$491,000) or Industrial sector: > KHR 4 billion (US$983,000) |
Businesses in petroleum operations and natural resource extraction have a higher 30% CIT. Meanwhile, businesses in QIPs enjoy 0% CIT.
Key Tax Obligations for Businesses in Cambodia
Value Added Tax (VAT)
The standard VAT rate in Cambodia is 10%. It is an indirect tax on goods, services, and fixed asset sales. You are required to register your business for VAT if you have an annual turnover of more than KHR 250 million (~USD 60,000).
However, smaller businesses can voluntarily register under the self-assessment system, especially if you are involved in exports or business-to-business (B2B) services. VAT returns must be filed monthly with payments due within 20 days of the following month.
Certain goods and services can also be exempted from VAT or are zero-rated. These include exports and services consumed outside Cambodia to support industries in garment, textile, and footwear export sectors, international transportation, and some agricultural products. Some sectors such as public postal services, healthcare, state-owned public transport, insurance, primary financial services, and land are also VAT exempt.
Withholding Taxes (WHT)
These are taxes that apply to various types of payments made to both tax residents and non-residents. Withholding taxes applies to Cambodian-sourced income such as interest, royalties, dividends, services performed in Cambodia, rental income, and gains from immovable property located in Cambodia. Small taxpayers are generally exempted from being withholding agents except for rental income-related WHT.
| Type of Payment | Resident Recipient Rate | Non-Resident Recipient Rate |
| Dividends | 0% | 14% |
| Interest | 15% (except domestic banks at 4% for non-fixed term and 6% for fixed-term) | 14% |
| Royalties | 15% | 14% |
| Fees for Technical/Management Services | 15% | 14% |
| Rental Income | 10% | 14% |
| Branch Remittance on Profits | N/A | 14% (can reduce to 10% with DTA approval) |
As the withholding agent, you are responsible for deducting and remitting the tax to the DGT within 20 days of the following month. Double Taxation Treaties (DTAs) may reduce applicable WHT rates.
Other Business Taxes
Depending on the nature of your business, you may are also required to comply with the following taxes:
- Public Lighting Tax of 5% on alcohol and tobacco supply at the first stage.
- Accommodation Tax of 2% on hotel services.
- Property-related taxes, including 0.1% on immovable property, 10% on property rental, and 2% for unused land.
- Patent tax and signboard tax based on taxpayer size and location.
- Transportation tax based on vehicle type and specifications.
Getting a Gold Star from the GDT
Tax compliance certificates in Cambodia serve as an official recognition of a business’s adherence to tax regulations and obligations. These certificates are issued by the GDT and categorize taxpayers into different levels of compliance based on a point system.
- Gold: 16-20 points, indicating excellent compliance
- Silver: 11-15 points, indicating good compliance
- Bronze: 1-10 points, indicating minimal compliance
Criteria for evaluation include timely submission of tax declarations, payments (including re-assessed taxes), maintenance of accurate accounting records, and a clean record without tax negligence. The certificate is usually valid for two years.
Here’s why you should maintain a Gold status with the GDT:
- Exemption from Certain Audits: Businesses holding a gold compliance certificate may be exempted from extended and frequent tax audits, reducing compliance costs and disruptions.
- Faster VAT Refunds: Compliant taxpayers may benefit from expedited VAT refund processes.
- Improved Reputation: Certification enhances the business’s credibility with tax authorities, investors, and partners.
- Regulatory Ease: Helps facilitate smoother interactions with government agencies and during licensing or permit renewals.
Want to attain a gold star certification with the GDT in Cambodia? Emerhub’s tax and accounting services can guide you through the country’s complex tax compliance and regulations. Fill out the form now!
FAQs About Tax Compliance in Cambodia for Businesses
Yes. By default, Cambodian companies follow the calendar year (January 1 to December 31) as their tax year. However, if your business is owned more than 51% by a foreign parent company, you may apply to the GDT to adopt a different fiscal year. This flexibility helps multinational corporations align reporting periods across jurisdictions.
If your company fails to file CIT returns or pay corporate income tax on time, Cambodia’s tax authorities impose penalties and interest charges. The penalty for late filing is typically 1% of the unpaid tax amount for each month of delay, up to a maximum of 12 months. Additionally, interest is calculated on the outstanding tax amount at a rate of 0.04% per day until the tax and penalties are fully paid. Persistent non-compliance can trigger audits and potential legal action, so timely filing and payment are essential to avoid significant financial and reputational risks.
Failure to submit the required semester and annual reports within 20 days after your tax return deadline risks losing your QIP status. This would result in forfeiture of valuable tax incentives and investment privileges. To maintain benefits, it is critical to meet deadlines and obtain the Certificate of Compliance (COC) from the Council for the Development of Cambodia (CDC).
If your business engages in taxable activities exceeding KHR 125 million (~USD 31,250) in turnover within 12 months, registration for VAT is mandatory either at the start of business or within 30 days after exceeding this threshold. Early registration is advantageous if you deal with VAT-creditable inputs or operate in export-supporting sectors eligible for zero-rating.
