Transcript Intermediate Microeconomics Chapter 1

KINGDOM OF CAMBODIA
NATION RELIGION KING
Ministry of Economy and Finance
General Department of Taxation
Tax System and Tax Regime
in Cambodia
Prepared by:
1- Mr. Tech Sokun Thearith, Litigation Office
2- Mr. Chuor Se, Legal Office
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Contents
I-Tax System
II-Tax Regime
I-Tax System
There are 15 type of Taxes, divided into State Budget
and Capital-Provincial Budget
I. State Budget
II. Capital-Provincial Budget
1.Tax on Profit (TOP)
8.Registration Tax (Tax on property transfer)
2.Tax on Salary (TOS)
9.Tax on Unused Land;
3.Value Added Tax (VAT)
10.Accommodation Tax
4.Excise Tax
11.Public Lighting Tax
5.Turnover Tax
12.Patent Tax
6.Tax on Property Rental.
13.Vehicles tax
7.Stamp Tax
14.Slaughter tax
15.Property Tax
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1-Tax on Profits
 Tax Rate:
– 20%: Legal persons;
– 30%: Oil and Gas and Natural Resource;
– 9%: Qualified Investment Project (QIP) for
transitional period 5 years;
– 0%: QIP for exemption period.
– 5% of gross premiums for insurance company
 Physical Persons which have annual profit:
–
–
–
–
–
From
0
From
6,000,001
From
15,000,001
From 102,000,001
Greater than
to
to
to
to
6,000,000 Riels
15,000,000 Riels
102,000,000 Riels
150,000,000 Riels
150,000,000 Riels
Tax Rate
0%
5%
10%
15%
20%
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1-Tax on Profits (cont)
 Withholding Tax
 For resident:
 15% income from service (management and consulting)
 10% income from rental of movable and immovable
property
 6% interest in come from fixed term deposit account
(banking institution)
 4% interest income from non-fixed term deposit account
(banking institution)
 For non-residents:
 14% for interest, royalty, rent, dividends, compensation
for management or technical services, and income
connected with use of property.
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1-Tax on Profits (cont)
 Additional Profit Tax
This tax shall not apply on the distribution of retained
earning, if an enterprises has already paid profit tax at the
normal rate of 20% for a legal person.
Tax Rate:
- 20%
- 11/91
- 0%
of retained earning, if an enterprise is distributing
profits which were subject to 0% profit tax rate.
of retained earning, if an enterprise is distributing
profits which were subject to 9% profit tax rate.
of retained earning, if an enterprise is distributing
profits which were subject to 20% profit rate.
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1-Tax on Profits (cont)
 Minimum Tax:
• 1% of the annual turnover. This tax is due irrespective
of the taxpayer profit or loss position.
• Impose on real regime taxpayers.
• is a separate and distinct tax from the tax on profits.
• This tax may reduce the annual tax on profits.
 Exemption:
- Government institutions;
- Religious organizations;
- Charitable, scientific, literary, educational or
labor organization;
- Any chamber of commerce, industry, or agriculture.
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2 - Salary Tax
 Tax Rate: A resident physical person is liable to the
monthly tax on salary and withheld by the employer:
Rate
From
0 Riels to
500,000
0%
From
500,001
to 1,250,000
5%
From
1,250,001
to 8,500,000 10%
From
8,500,001
to 12,500,000 15%
From 12,500,001
to
upwards 20%
 For non-resident physical person: 20% are withheld by
the employer.
 20 % of the total values of fringe benefits are withheld by
the employer.
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2- Salary Tax (cont)
 Exemptions:
- Diplomatic and consular, foreign representative,
international organizations and agencies of technical
cooperation of other governments;
- Members of the Parliament and Senate;
- Real refunds on professional expenses;
- Indemnity for the layoff;
- Additional remuneration with social characteristics;
- A flat allowance for mission and travel expenses.
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3 – VAT (Value added Tax)
 Tax Rate:
– Uniform rate of 10%
 Taxable supply:
- The supply of goods or services by a taxable person in
the Kingdom of Cambodia;
- The appropriation of goods for his own use by the
taxable person;
- The making of a gift or supply at below cost of goods
or services by the taxable person;
- The import of goods into the customs territory of the
Kingdom of Cambodia.
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3 – VAT (Value added Tax)
 Non Taxable Supplies:
1. Public postal service;
2. Hospital, clinic, medical, and dental services ;
3. The service of transportation of passengers by a wholly state
owned public transportation system;
4. Insurance services.
5. The importation of articles for personal use that are exempt from
customs duties;
6. Non profit activities in the public interest that have been
recognized by the Minister of Economy and Finance.
 Non taxable supplies for diplomatic missions and
international organizations:
- The imports of goods for/by foreign diplomatic and consular
missions, international organizations and agencies of technical
cooperation;
- The import of goods for the personal use of the official personnel
of missions and organizations.
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4 -Turnover Tax
 Tax rate: 2%
- Applied to any persons subject to the Estimated
Regime system.
- Turnover tax payable each month may be fixed in
advance for period of 3,6,12 months.
 Tax base:
- It’s imposed tax on supply both goods and services in
Cambodia.
 Exemption:
- The sale of agricultural products that habitual
agricultural work of farmers.
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5 - Excise Tax
 Tax Rate:
- 20% for beer;
- 10% for all types beverages, tobacco product, hotel
and other entertainment services and airline tickets;
- 3% for telecommunication services.
 Tax Base:
- 65% of invoice price excluded VAT.
- A tax levied on select products both locally produced
and imported.
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6-Tax on Property Rental
Tax
Rate:
- 10% income from rent
Tax
Base:
- A tax on receipts from rents on land, building and
certain equipment paid by the owner.
 Exemption:
- Property owners whose monthly income from rent
is below CR 500,000 under the estimate regime are
exempted.
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7 - Stamp Tax
Nature
of Tax:
This tax is payable in the form of stamps affixed to some
documents, panos/posters (advertising), and trade
marks.
 Tax Rate:
- Specific small amounts depending on the type of
document ranging from CR 100 for school registration to
CR 2,000 for investment authorizations.
- The person who supplies these products is responsible
for the payment of this tax to the tax administration.
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8 - Registration Tax (Tax on property transfer)
 Tax rate: is generally levied at 4% of the transfer
value.
 Tax levied on the rights transfer of immovable
properties inform of sale, exchange ,donated and
shareholder such as land, buildings, houses,
vehicles.
 Exemption: for transfers of property of the State,
government transfers, public utilities, and charitable
organizations.
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9- Tax on Unused Land
Tax Rate: 2% of the land value
Tax base: is evaluated by the Commission for the
Evaluation of Unused Land.
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10 - Accommodation Tax
Tax Rate: 2% of the rental price
Tax Base:
- Rental price per room including all taxes and
service charges, except VAT.
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11 - Public Lighting Tax (PLT)
Tax Rate:
- 3% of the selling value of alcoholic drinks and
cigarette.
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12 – Patent Tax

Nature of Tax:
• An annual registration or license fee levied on all
business, industries, and services. The base is the
previous year’s turnover. New businesses are taxed
on the basis of a provisional estimate.

Exemption:
• Farmers are not subject to the tax.
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13 - Vehicles Tax
Nature
of Tax:
- Annual levy on vehicles and boats
Exemption Vehicles:
- Ambulance and fire truck; vehicles of the Royal
Cambodia Force, military police, national police;
vehicles owned by diplomatic missions and
international organizations.
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14 - Slaughter Tax
Nature
of Tax:
- Tax levied on slaughterhouses based on the value of
the livestock that is slaughtered.
Exemption:
- Exempted from slaughter tax are livestock
slaughtered for celebrating national tradition, for
research uses and killed in accident.
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15- Property Tax
 It is yearly tax on land, house and buildings
 The tax rate is 0.1% on the Asset Value after deducting
100 million riels (=USD25,000)
 The exemption
– property less than 100 million riel
– Agriculture land
– Property owned by the Royal Government
– Property owned by any organization or person in
relation to nonprofit religious and charitable)
– Property owned by a foreign government diplomatic or
consular, and agencies of technical cooperation of
other government.
II- Tax Regimes
Two Regimes:
1. Self Assessment System (Real Regime)
2. Official Assessment System (Estimated Regime)
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1-Self Assessment System

Criteria for Self Assessment System:
- All legal persons
- Enterprises that have annual taxable turnover exceed:
 500 million Riel for the supplies of goods;
 250 million Riel for the supplies of services; and
 125 million Riel for Government’s contract value.
- Other Enterprises register voluntarily;
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1-Self Assessment System (Cont)
 Register within 15 days of starting economic activity.
 VAT Registration: Within 30 days of the day on which the
person becomes a taxable person.
 Tax Declaration:
 Profit tax: In the period of 3 months after the end of the
tax year.
 VAT: The 20th day of the month following the month in
which the payment is made.
 Other Tax Including Prepayment: The 15th day of the
month following the month in which the payment is
made.
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2.
Official Assessment System
 Determination of taxable turnover is based on
the discussion between tax officers and
taxpayers.
 This tax level on estimated profit shall be kept
constant for a period of 3 months, 6 months or
1 year.
 Declaration: Every year by October 31, in
the form provided by the tax administration.
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