INTERNATIONAL EXECUTIVE SERVICES

Thinking Beyond Borders
Cambodia
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Member firms of the KPMG network of independent firms are affiliated with KPMG International. THINKING BEYOND BORDERS: MANAGEMENT OF EXTENDED BUSINESS TRAVELERS © 2012 KPMG International Cooperative (“KPMG International”). All rights reserved. regardless of whether the salary is paid in Cambodia or abroad. KPMG International provides no client services. Contact Michael Gordon KPMG in Cambodia Tax Partner T: +855 23 216 899 E: mgordon@kpmg.kh Key messages Employers and employees are jointly responsible for the monthly salary tax and fringe benefits tax liabilities in Cambodia.com. An individual’s liability to Cambodian tax is determined by his/her residence status for taxation purposes and the source of income derived by him/her.Cambodia Introduction Residents are taxed on worldwide income while nonresidents are taxed on Cambodian-sourced income only. Cambodia levies tax on fringe benefits provided to employees. a Swiss entity. .

Indirect taxes Value-added tax (VAT) is applicable at a standard rate of 10 percent or zero percent in respect to taxable supplies. Accordingly. Employer reporting and withholding requirements Employers are responsible for withholding salary tax and fringe benefits tax from their employees and declare it to the Cambodian Tax Department. but this would be dependent on the type of services performed and the level of authority the employee has. Tax trigger points Technically. Fringe benefits provided by employers are subject to fringe benefits tax at the rate of 20 percent. Residents are entitled to tax relief of 75. Nonresidents are taxed at a flat rate of 20 percent. Non-residents are taxed at a flat rate of 20 percent on their Cambodian-sourced income only. Foreigners cannot legally work in the Kingdom of Cambodia unless they possess a work permit and a work identity card issued by the Ministry of Labor and Vocational Training. which levies tax on fringe benefits provided to employees. Member firms of the KPMG network of independent firms are affiliated with KPMG International.000 for a dependent spouse. Cambodia also has a fringe benefits tax regime. Residents are taxed at progressive rates ranging from 5 percent up to 20 percent. The type of visa required will depend on the purpose of the individual’s entry into the Kingdom of Cambodia. Residents are not restricted from establishing foreign currency bank accounts. a Swiss entity. Types of taxable income All types of remuneration and benefits received by an employee within the framework of fulfilling employment activities constitute taxable income. overtime. This includes salary and wages. and other compensation. Monthly salary tax and fringe benefits tax returns are due by 15th of the following month. Under the scheme of occupational risk. All rights reserved. food and accommodation. Workers/employees of enterprises/establishments registered with the NSSF have the right to claim compensation when they sustain an injury at work. Permanent establishment implications There is potential that a permanent establishment could be created as a result of extended business travel. the monthly salary tax deduction is considered to be a final tax for individuals. bonuses. .Income tax Liability to salary and fringe benefits tax An individual’s liability to Cambodian tax is determined by his/her residence status.000 Cambodian riel (KHR) per month for each child and KHR75. redundancy payments. The value of fringe benefits is the fair market value of the benefit provided. A non-resident is an individual who is not a resident. Compliance obligations Individuals are not required to submit tax returns. VAT registration is required. Employee compliance obligations Resident and nonresident individuals are not required to file annual tax returns. employers or owners of enterprises/establishments with eight employees or more are required to report the number of workers/employees and pay a contribution of 0. Cambodia has no tax treaty network. THINKING BEYOND BORDERS: MANAGEMENT OF EXTENDED BUSINESS TRAVELERS © 2012 KPMG International Cooperative (“KPMG International”). Liability to social security The National Social Security Fund (NSSF) was set up to manage the occupational risks for all workers/employees under the provisions of the Cambodian labor law. KPMG International provides no client services. Other issues Tax rates Foreigners are required to have a work permit. such as private use of motor vehicles. utilities and domestic staff and pension fund contributions exceeding 10 percent of the employee’s monthly salary.8 percent of the average monthly wage of their workers/employees to the NSSF by the 15th of the following month. inclusive of all taxes. there is no threshold/minimum number of days that exempts the employee from the requirements to file and pay tax in Cambodia. Transfer pricing Cambodia currently has no transfer pricing regime. every month. An individual is considered a tax resident if he/she is domiciled in or has a principal place of abode in Cambodia. or is present in the Kingdom of Cambodia for more than 182 days in any period of 12 months ending in the current tax year. Work permit/VISA requirements A visa must be applied for before an individual enters the Kingdom of Cambodia (though citizens of certain countries do not require a visa). Double taxation treaties Cambodia has not entered into any double taxation treaties. Definition of source Cambodian-sourced salary is salary received from the fulfillment of employment activities in Cambodia.

All rights reserved. Nondeductible costs for assignees Employees are not allowed any deductions against their salary income. Although the KHR is the official currency of Cambodia. Exchange control The Foreign Exchange Law of 1997 provides that there should be no restrictions on foreign exchange operations. There are currently no established guidelines with regard to costs that are nondeductible for employers or assignees. Member firms of the KPMG network of independent firms are affiliated with KPMG International. THINKING BEYOND BORDERS: MANAGEMENT OF EXTENDED BUSINESS TRAVELERS © 2012 KPMG International Cooperative (“KPMG International”). a Swiss entity. There are no restrictions on the establishment of foreign currency bank accounts in Cambodia for residents. However. these operations can only be performed through an authorized financial institution. KPMG International provides no client services.Local data privacy requirements Cambodia currently has no data privacy laws. as employees are not required to submit annual tax returns. the US dollar (USD) is in common circulation and the majority of commerce is denominated in USD. .

All rights reserved. there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. a Swiss entity. KPMG International provides no client services. Member firms of the KPMG network of independent firms are affiliated with KPMG International.com/socialmedia The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. nor does KPMG International have any such authority to obligate or bind any member firm. Publication name: Thinking Beyond Borders – Cambodia Publication number: 121073 Publication date: November 2012 . No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties. The KPMG name.kpmg. Designed by Evalueserve. Although we endeavor to provide accurate and timely information. logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. © 2012 KPMG International Cooperative (“KPMG International”).