Cambodia: Annual Compliance Obligations 

February, 2022 - Segolene Leffy

With the 2022 year well under way most enterprises in Cambodia are turning their attention to their annual compliance obligations. There have been some recent changes and updates with respect to the annual compliance obligations for most enterprises in Cambodia. We have included the recent changes in our summary below.

2021 Tax on Income Return

Notification 1265 issued on the 24th of January 2022 provides instructions on the E-filing of the annual Tax on Income (“TOI“) return for the 2021 tax year in accordance with Instruction 3140 GDT dated 18 February 2021. E-filing for TOI 2021 and payment of tax must be completed by the 31st of March 2022 or within 3 months after the end of tax year for enterprises that have a non-standard tax year.

Those self-assessment taxpayers that have local branches are required to file a consolidated 2021 TOI return attaching the financials of the respective branches with the return. Self-assessment taxpayers that have both QIP and non-QIP activities shall submit their 2021 TOI return in accordance with Prakas 1127 MEF.P dated 11 October 2016.

Employees of self-assessment taxpayers or tax agents should have in their possession employee ID cards or POA’s when submitting TOI declarations on behalf of the taxpayer. In addition, all self-assessment taxpayers filing 2021 TOI returns are required to include a balance sheet, profit and loss account and an annexed list of any related party transactions carried out during the 2021 tax year.

2021 Transfer Pricing Documentation

The prevailing Cambodia transfer pricing regulation Prakas No. 986. MEF.P. dated 10 October 2017  requires taxpayers with related party transactions during the 2021 year to comply with two annual transfer pricing requirements:

  • Completion of the Annual Transfer Pricing declaration which is annexed to the 2021 TOI return;
  • Completion of a 2021 local Transfer Pricing report, the completion of which is acknowledged in the 2021 TOI return and which is required to be disclosed to the GDT – typically during the course of a tax audit.

Some important points that taxpayers need to pay attention to:

  • A transfer pricing report that has been prepared for an earlier tax year does not in itself meet the requirement for the 2021 tax year. In other words – even if the related party transactions remain the same, a stand-alone transfer pricing report needs to be prepared for each tax year noting any changes in the characterization – for each Cambodian entity. 
  • Taxpayers should also be aware that it is recommended that benchmarks that are used to support a transfer pricing methodology should be refreshed typically after three (3) years.
  • Certain transactions may attract greater scrutiny from the GDT – including payment of management fees, technical services fees, royalties and other intangibles, and certain long-term intercompany financial arrangements – and taxpayers can best manage the risk of audit through ensuring appropriate arm’s length pricing and pro-active documentation of these transactions.

Penalties may apply for non-compliance with TP requirements, including revoking the taxpayer’s certificate of tax compliance, increasing the tax payable inclusive of 2% interest, and criminal charges in the case of tax evasion. 

2022 Patent Tax

All self-assessment taxpayers operating in Cambodia are required to register and pay their 2022 Patent Tax by the 31st of March 2022 for each business activity that they carry out. The amount of Patent Tax payable in 2022 is dependent on the particular classification of the enterprise under the Self-Assessment Regime of Taxation. The 2022 Patent Tax fees are as follows:

 Self-Assessment Tax Regime 2022 Patent Tax Fee
Khmer Riel (KHR)
2018 Patent Tax Fee
United States Dollars (US)
Small Taxpayer KHR 400,000 USD 100
Medium Taxpayer KHR 1,200,000 USD 300
 Large Taxpayer KHR 3,000,000
KHR 5,000,000*
USD 750
USD 1,250

*If the annual turnover of the Large Taxpayer exceeds KHR 10,000 million (USD 2.5 million) then the Patent Tax payable will be USD 1,250. If the annual turnover of the Large Taxpayer is less than KHR 10,000 million (USD 2.5 million) the Patent Tax payable will be USD 750.

Application for Annual Certificate of Compliance

All Cambodia enterprises that hold Qualified Investment Projects (“QIP”) are required to submit an application for a Certificate of Compliance (“COC”) by the 31st of March of each year following the year in which they obtained a Final Registration Certificate from the Council for the Development of Cambodia. If a company holding a QIP fails to obtain a COC it may lose its investment incentives.

Annual Declaration of Commercial Enterprise

Following the issuance by the Ministry of Commerce (“MOC”) of Prakas on the filing of Annual Declarations of Commercial Enterprises (“ADCE”) dated 5 April 2017, the ADCE must now be submitted by each enterprise to the MOC using its online system. 

Use of the online system for submission of an ADCE is now compulsory and must be performed within three months from the anniversary of the enterprise’s re-registration on the MOC’s online system. A submission made after that three months period will be subject to a penalty of KHR 2,000,000 (approx. USD 500) imposed by the MOC.  

Submission of Annual Financial Statements

Audited Financial Statements

Entities who are required to obtain audited financial statements under Prakas 563 (please refer to the criteria here) are required to submit their audited financial statements with the Accounting and Auditing Regulator (“ACAR“), using its e-filing system, no later than 6 months and 15 days after the close of the accounting period.

Unaudited Financial Statements

Under the recently implemented Instruction No. 002 AAR.N those entities that are not required to have their 2021 financial statements audited under Prakas 563, are now required to submit their 2021 unaudited financial statements through ACAR’s e-filing system no later than 3 months and 15 days after the close of the accounting period which for most entities will be by 15 April 2022.

Notification Regarding Use of English

In addition Instruction 001 AAR.I, issued on the same day as Instruction No. 002 AAR.N, requires enterprises looking to use the English language in their computerized accounting systems and/or other relevant computerized systems to notify the ACAR before 31st March 2022.

Failure to comply with the above obligations will result in penalties being imposed.

To read more about these updates and the associated government charges please refer to our recent update here

Labour Compliance

Foreign Employee Quota for 2023

Enterprises employing or intending to employ foreign employees are required to apply for a foreign employee quota via the Ministry of Labour and Vocational Training (“MLVT”) online system.

All applications must be submitted by the required deadline each year. Typically, the foreign employee quota application window is open from early September to 30 November each year for the use of foreign employees in the following year.

According to Joint Prakas 659, if an enterprise hires foreign employee(s) without the approved quota, it may be subject to a fine of up to KHR 2.52 million (approximately USD 630) by the MLVT or KHR 3.6 million (approximately USD 900) by the court. Please note that fines may be imposed in triple in the event of repeat offenses. Additional sanctions, as imposed by the Labour Law, include terms of imprisonment from six days to one month. To our knowledge to date, terms of imprisonment have yet to be strictly enforced.

Foreign Employee Work Permits for 2022

A foreign national must hold a valid work permit in order to lawfully work in Cambodia.

A work permit for foreign employees is valid for only one year. No matter when the work permit for foreign employees is issued by the MLVT/DLVT, it expires on 31 December of that year. If an enterprise continues to employ foreign nationals in Cambodia for the following year, the enterprise needs to apply for an extension of their foreign work permits by 31 March of the following year.

While pursuant to Prakas 352, a work permit or an extension thereof can be requested online, foreign employees may also be called to present themselves in person before the MLVT after submission of their work permit applications subject to the discretion of the MLVT.

In accordance with the issuance of Joint Prakas 659, the MLVT has increased its investigations and is actively applying fines against enterprises that have not complied with the above requirements. Additionally, the abovementioned annual fee of KHR 520,000 (approximately USD 130) may be required to be paid accumulatively for each year of non-compliance by an enterprise (per foreign employee).

According to Joint Prakas 659, if an enterprise hires foreign employee(s) without a work permit, it may be subject to a fine of up to KHR 2.52 million (approximately USD 630) by the MLVT or KHR 3.6 million (approximately USD 900) by the court. Please note that fines may be imposed in triple in the case of subsequent and repeat offenses. Additional sanctions, as imposed by the Labour Law, include terms of imprisonment from six days to one month and, in the case of repeat offences, from one to three months. In addition, pursuant to the Law on Immigration and its implementing regulations, the non-compliant enterprise may be subject to a fine of up to KHR 500,000 (approximately USD 125) as imposed by the MOI, and in case of subsequent offense(s), imprisonment of up to three months (noting that the foreign employee may be subject to deportation in accordance with the Law on Immigration).

National Social Security Fund (“NSSF”)

An enterprise employing one or more employees is required to register itself and all of its employees with the NSSF within 30 days after the date of its opening. Once registered, the enterprise must pay a monthly contribution to (a) occupational risk insurance (work-related accidents and occupational diseases); and (b) health care insurance. In 2019, the new Law on the Social Security Scheme was promulgated, however, the pension scheme has not yet been implemented.

Each registered enterprise must pay the contribution by the 15th of each month and report to the NSSF on the number of employees before the 20th of each month. These dates may be changed subject to periodic notifications issued by the NSSF.

Seniority Pay for Employees under Unspecified Duration Contract (“UDC”)

Seniority pay equal to 15 days of wages and fringe benefits per year must be paid to employees who are employed under UDCs during on-going employment every six months per year, divided into 7.5 days of wages and other benefits to be paid in June and 7.5 days of wages and other benefits to be paid in December.

Large Employer Obligations

When an enterprise employs 100 or more employees, the company must employ 1% of its total workforce as qualified disabled persons and report to the MLVT and the Ministry of Social Affairs, Veteran and Youth Rehabilitation in January each year.

An enterprise employing more than 60 employees is required to conduct annual training of apprentices based on the following quota in proportion to the enterprise’s total workforce:

  1. 10% for an enterprise that employs between 61 to 200 employees;
  2. 8% for an enterprise that employs between 201 to 500 employees; and
  3. an additional 4% for every further 500 employees at the enterprise that employs more than 51 employees, provided that a maximum of 110 apprentices may be trained by an enterprise in one year.

The deadline for fulfilling the training of apprentices is 31 October each year.

It is important to note that the enterprises that have not fulfilled the obligations regarding the training of apprentice must submit a request to the MLVT for payment of tax in lieu of training the apprentices, in an amount equivalent to 1% of total annual salary of all employees per year.

DFDL Services 

In order to avoid penalties and the loss of investment incentives, we can assist you to comply with the obligations set out above.

It is also important to note that the Amendment on the Law on Commercial Enterprises dated 29 January 2022 states that the limited liability company incorporated in Cambodia is required to appoint a corporate secretary who permanently resides in Cambodia. In this regard, we can assist with your corporate secretarial needs as required by law. Our services include the maintenance of statutory records and ensuring compliance with ongoing corporate governance requirements, such as share certificates, share registers, quarterly board meetings and annual general meetings.  

For any further information regarding this update please contact your usual DFDL advisor or contact.


Tax services required to be undertaken by a licensed tax agent in Cambodia are provided by Mekong Tax Services Co., Ltd, a member of DFDL and licensed as a Cambodian tax agent under license number – TA201701018.

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.



Clint O’Connell

Partner, Cambodia Deputy Managing Director

& Head of Cambodia Tax Practice

[email protected]

Sophorne Kheang

Sophorne Kheang


[email protected]

Vajiravann Chamnan

Tax Director

[email protected]



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