CEO of Cambodian Investment Management and Eurocham Tax Committee Chairman, Anthony Galliano, gave a presentation at the Eurocham Cambodia Tax Forum 2016 on Recent Tax Changes and White Paper Recommendations

1. RECENT TAX CHANGES
and
WHITE BOOK
RECOMMENDATIONS
FOLLOW-UP
Anthony Galliano
Chairman, EuroCham Tax Committee
CEO, Cambodia Investment Management

2. ANTHONY GALLIANO
Anthony is CEO of Cambodian Investment
Management, Chairman of Premium Human
Resources, Cambodian Investment Management
Insurance Agent, Dynamo Digital, Jump Digital
(Cambodia) and Phnom Penh BG Serviced Offices.
A career corporate banker with 27 years
international experience, he began his career in
the US, has been stationed in London, Brussels,
Hong Kong and Bangkok with Citibank as well as
Indonesia and Cambodia with ANZ. Anthony holds
a degree in Accounting, and has a Diploma in
Cambodian Tax.
Group CEO, Cambodia Investment Management; Chairman, EuroCham Tax Committee

3. TOPICS COVERED
1. Recent changes in tax regulations materially
impacting taxpayers 2015/2016
2. EuroCham White Book policy recommendations
and response from the GDT
3. Further initiatives from Eurocham

4. A CHANGING ENVIRONMENT FOR
TAXPAYERS
 Increased Regulation
 Procedural Changes
 More skilled and professional tax department
 Stricter enforcement and heightened supervision
 Expanding Tax Base

5. RECENT TAX CHANGES
 2016 Law on Financial Management (LoFM) (Promulgated
on 17 December 2015) Prakas on classification of taxpayers
under Real Regime System (Prakas no. 1819. MEF.Prk dated
25 December 2015)
 Prakas on procedure for the management of patent tax
collection and Instruction on the declaration and payment
of the 2016 patent tax
 (Prakas no. 1821.MEF.Prk dated 25 December 2015 and
notification no. 032.GDT dated 4 January 2016)

6. WHAT WAS THE IMPACT
 Abolished the Simplified and Estimated regimes in
Cambodia, only the Real Regime remained
 Significantly expanded the Tax Base
 Eliminated the competitive advantage of
Estimated Regime Taxpayers
 Increased efficiency in the GDT/Tax Branches

7. WHAT ARE THE MAIN POINTS
Categorization of taxpayers by size
 Small
 Medium
 Large

8. SMALL TAXPAYERS
Small taxpayers are Sole Proprietorships or Partnerships that:
 Have annual taxable turnover from Khmer Riel (“KHR”) 250 million
(USD62.5k) to KHR700 million (USD175k);
 Have taxable turnover, in any period of three consecutive
calendar months (within this tax year), exceeding 60 million KHR
(USD15k);
 Expected taxable turnover of 60 million KHR (USD15k) or more in
the next three consecutive months;
 Participate in any bidding, quotation or survey for the supply of
goods and services including duties.

9. MEDIUM TAXPAYERS
 Enterprises that have annual turnover from
KHR700 million (USD175k) to KHR2,000 million
(USD500k);
 A Registered legal entity with competent
institution;
 Sub-national government institutions,
associations, and non-governmental
organizations.

10. LARGE TAXPAYERS
 Enterprises that have annual turnover over KH2,000
million (USD500k);
 Branch of a foreign companies;
 A Qualified Investment Project (“QIP”) as approved
by the Council for the Development of Cambodia;
 Government Institutions, diplomatic missions and
foreign consulates, international organizations and
other Government Technical Cooperation Agency

11. 2016 Patent Tax Fee
Khmer Riel (KHR)
2016 Patent Tax Fee
United States Dollars (US)
Small Taxpayer KHR400,000 USD100
Medium Taxpayer KHR1,200,000 USD300
Large Taxpayer
KHR3,000,000
KHR5,000,000
USD750 or
USD1,250 (over 2,5m rev)
PATENT TAX FEES

12. ADDITIONAL PATENT TAX
Additional Patent Tax shall be paid:
 If an enterprise carries out different types of
businesses, a separate patent tax certificate is
required for each activity.
 If the enterprise carries out any branch, warehouse or
business in different cities or provinces, a separate
patent tax certificate for each location is required.

13. ADDITIONAL PATENT TAX
 Large Taxpayers are required to pay KHR3,000,000 (~USD750)
for each additional patent tax certificate, if the enterprise
carries out any branch, warehouse or business in different
cities or provinces.
 Taxpayers are obliged to display their valid patent tax
certificates on their business premises.
 Taxpayers who commence business within the first 6 months of
the year shall pay patent tax in full while those that
commence business in the last 6 months of the year shall pay
half the patent tax fee.

14. PRAKAS no. 1820. MEF.Prk
DATED 25 DECEMBER 2015
 Rules and procedures for the implementation of
the simplified accounting for small taxpayers.
 The objective of this Prakas is stated to provide
guidance on simplified accounting requirement
in order to facilitate the small and family
businesses operations.

15. Small taxpayer is required to maintain only 3
simplified accounting books:
 Purchase Day Book is to record daily purchases
 Sales Day Book is to record transactions on the
supply of goods or services.
 Inventory Book is to record the beginning stock,
purchase during the year, and ending stock for
enterprises who making supply of goods.
PRAKAS no. 1820. MEF. Prk
DATED 25 DECEMBER 2015

16. SPECIAL INCENTIVES
FOR SMALL TAXPAYERS
 2% VAT payment rather than 10%
 Withholding Tax on Rent
 Progressive Tax Tranches for Tax on Profit

17. GDT’s INSTRUCTION NO. 1127 DATED
26th OF JANUARY 2016
 Instruction on invoicing requirements (including
invoice criteria) for self-declaration taxpayers (i.e. real
regime).
 In addition to the existing criteria of a tax invoice as
stated in the Value Added Tax (VAT) regulations,
taxpayers are now required to use good quality ink
and paper for printing invoices to ensure that they
can be maintained in good condition for 10 years.

18.  4 invoice templates have been provided by the GDT, can be
modified as long as the invoice contains the criteria
 Buyers also have to sign on the invoices, however Customers do
not need to return signed invoices to the Supplier.
 Invoice must be issued either in the Khmer language or two
languages (i.e. Khmer with English language underneath).
 Any tax invoices not issued in accordance with the existing and
new criteria above won‟t be accepted as valid invoices to claim
input VAT credit, nor to support the deductibility of expenses
GDT’s INSTRUCTION NO. 1127 DATED
26th OF JANUARY 2016

19.  Name, address, and value-added tax identification number
(VATTIN) of the seller or supplier
 Clear invoice number in a chronological order and date of
issuance of the invoice. Invoice sequencing restarts at beginning
of tax year.
 Name and address of the purchaser and value-added tax
identification number
 Description, quantity, and selling price of the goods or services
 Total prices excluding tax and separate tax amount
VAT INVOICE REQUIREMENTS AS SET
OUT IN THE LAW ON TAXATION

20. SUB-DECREE, NO. 03 SD, DATED 6 JANUARY 2016
THE ORGANIZATION AND FUNCTIONING OF THE
COMMITTEE OF TAX ARBITRATION (CTA)
The CTA shall review, resolve and make decisions
on protests regarding customs, excise and tax
disputes arising from final decisions or rulings by the
General Department of Customs and Excise
(GDCE) and/or the General Department of
Taxation (GDT).

21. SUB-DECREE, NO. 03 SD, DATED 6 JANUARY 2016
THE ORGANIZATION AND FUNCTIONING OF THE
COMMITTEE OF TAX ARBITRATION (CTA)
 A protest letter is to be submitted within 30
working days by the taxpayer, if dissatisfied with
the tax notices
 GDT or GDCE to respond within 60 working days
of receiving the protest letter
 A protest letter is to be submitted to the CTA
within 30 working days by the taxpayer, if
dissatisfied with the GDT or GDCE‟s resolution.

22. SUB-DECREE, NO. 03 SD, DATED 6 JANUARY 2016
THE ORGANIZATION AND FUNCTIONING OF THE
COMMITTEE OF TAX ARBITRATION (CTA)
 The CTA to respond within 60 working days or reasonable
timeframe depending on the tax issues/cases of receiving the
protest letter
 A protest letter is to be submitted as an Appeal to the Court within
30 working days by the taxpayer, if dissatisfied with the CTA‟s
resolution
 The appeal to the court does not prevent the implementation of
the resolution by the CTA, as per the existing law, “The taxpayer
must deposit in the national treasury an amount of money equal
to the taxes, additional taxes and interest under dispute and as
assessed by the tax administration before filing the appeal to the
court.”

23. PRAKAS No. 496 MEF.P. ON TAX
REGISTRATION, APRIL 6TH, 2016
Any company‟s chairperson/owner of foreign
nationality who resides outside of Cambodia and is
unable to be physically present for their photo
taken and finger prints scanned can issue a written
authorization to a board representative to act on
their behalf by having their picture taken and
fingers scanned

24. WHITE BOOK RECOMMENDATIONS
What is the “White Book”
 EuroCham has developed an Advocacy pillar
dedicated to promoting dialogue with its
Cambodian counterparts, both within the Royal
Government and the private sector.
 EuroCham relies on the works of its Sectorial
Committees, the Tax Committee is one of 9
committees

25. WHITE BOOK RECOMMENDATIONS
 The committees contributed to the publication of
the “White Book”, a collective expression of the
views of EuroCham member companies on
specific aspects of the business environment in
Cambodia.
 In July, a delegation from Eurocham Cambodia
met with H.E. Kong Vibol and his deputy director
generals to discuss the tax recommendations
raised in the “White Book”.

26. KEY TAXATION
RECOMMENDATIONS
Withholding Tax
 Reconsider Withholding Tax on Services to
non-registered taxpayers
 Reconsider Withhold Tax on Rent on a Property
owned by a Registered Company

27. VAT
 More specific guidance for VAT exemption on
exporting of services
 Reiterate the timeframe within which VAT refund
application should be processed
KEY TAXATION
RECOMMENDATIONS

28. Tax Registration
Requirement for a Lessee to provide evidence of
immovable property tax on a property it has leased
for conducting business.
Pre-payment of Profit Tax/Minimum Tax
Reconsider PPT/Minimum Tax for business models
that have high turnover and low margin
KEY TAXATION
RECOMMENDATIONS

29. Entertainment Expense
Setting allowances for Entertainment Expense
QIP Tax on Profits, Dividends(R/E on Holiday Period)
Reconsider Article 23 which provides a „claw-back‟
mechanism – if a QIP has retained earnings during the
„profit tax exemption‟ period, the 20% tax rate that they
would have been paying if not holding QIP status is
applied at the point that they seek to repatriate dividends.
KEY TAXATION
RECOMMENDATIONS

30. RECENT TAX CHANGES &
WHITE BOOK RECOMMENDATIONS
Next Steps
Discussing MOU to continue dialogue and
collaborate on 2017 White Book
QUESTIONS
THANK YOU

31. EuroCham Cambodia
TAX FORUM
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