Letter no. 2039 dated 1 February 2022 issued by the General Department of Taxation (“GDT“) outlines the extension of monthly tax exemption to hotels, guesthouses, restaurants and travel agents registered with the GDT that operate in Phnom Penh, Siem Reap, Preah Sihanouk, Kep, Kampot, Bavet and Poi Pet will be extended for six more months (from 1 January 2022 to the end of June 2022), noting that these businesses still have an obligation to submit their tax returns and use E-VAT every month during the exemption period.

The Minimum Tax exemption provided to all airline entities operating in Cambodia will also be extended for six more months (from 1 January 2022 to the end of June 2022). During this exemption period, airline entities are not required to pay the monthly 1% Pre-payment of Tax on Income.

Reference:

The exemptions outlined above were outlined in the Strategic Framework and Programs for Economic Recovery in the Context of Living with COVID-19 in a New Normal 2021-2023 that was signed by the Royal Government of Cambodia in December 2021 (“Strategic Framework“). The Strategic Framework has the stated objective of putting Cambodia’s economic growth, in the near-and-medium term, back on the path to its potential growth and to strengthen resiliency for sustainable and inclusive socio-economic development in the long term.

The Strategic Framework contains a number of sector based programs designed to revive those key sectors of the economy which were affected by the COVID-19 crisis by addressing structural issues, and eliminating specific barriers in the sectors, together with harnessing potential sectors for economic growth. Of note under the Program titled “Improving Tax Services” the following Policy Measures are set out:

• Review the possibility of postponing the implementation of capital gains tax until 2023 to help boost investment;
• Continue to exempt the payment of minimum tax for airline companies registered in Cambodia for the first half of 2022;
• Continue to extend the payment of civil aviation fees for airline companies registered in Cambodia for the first half of 2022;
• Continue to exempt all monthly tax duties for hotels, guesthouses, restaurants and travel agencies, registered with the GDT, and have business activities in Phnom Penh, Siem Reap, Sihanoukville, Kep, Kampot, Bavet and Poipet for the first half of 2022. In case of outstanding debt before the COVID-19 crisis for tour operators in other provinces, the audit will be postponed in 2021. These businesses are still obliged to tax filing and declaration and use the online system of E-VAT every month during the exemption period;
• Review the possibility of extending the stamp duty exemption on property worth equal to or less than USD70,000 (seventy thousand) to help ease the burden on taxpayers and the real estate sector;
• Examine the feasibility and accelerate the modernization of the three main functions of the GDT (E-registration, E-filing and E-payment) using a common platform that allows taxpayers to register, file declarations and pay taxes, which is easy to use, fully automated and interconnected, and reduces costs.

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.

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