The Royal Government of Cambodia has implemented a series of tax incentives for the restaurant industry in response to COVID-19's economic impact, including tax exemptions, suspension of social security contributions, and license fees. Registered businesses in specified tourist areas remain required to file tax returns but are exempt from paying certain taxes during specified periods. The measures aim to support the recovery of the tourism sector and promote compliance among small and medium enterprises.

1. Taxes Incentives for the
Restaurant Industry
Anthony Galliano, Group CEO
August 23rd, 2021

2. Tax Incentives for the Restaurant Industry
In response to the severe financial and economic impact of COVID-19 on the certain sectors of the
economy, the Royal Government of Cambodia (“RGC”) issues regulations to support businesses.
The relief is generally tax exemptions, suspension of license fees and patent tax, suspension of NSSF
contributions, pension scheme payments, and seniority payments. As it was unpredictable just as
long the impact of the pandemic would remain, the government issues “rounds” of measures over
time.
The Measures generally are:
- Exemption of paying tax, but not for filing tax, for 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 .
- Exemption of the obligation to make monthly contributions to the National Social Security Fund
(“NSSF”) for occupational risk and healthcare schemes during any period of business suspension.
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3. Tax Incentives for the Restaurant Industry
Rounds:
February 25th, 2021, Letter 1313 MEF, dated 25 February 2020 and Notification no. 002 MEF
Registered taxpayers in the Siem Reap province whose business activity is Hotels and Guesthouses were
exempted from the payment of all monthly taxes for the period of four 4 months from February 2020 to May
2020, but were still required to submit their monthly tax returns and to continue to use the online system to
manage their VAT (E-VAT) every month for the period of this exemption. Additionally there are to be no
Comprehensive Tax Audits for the 2020 tax year.
March 31st, 2020 RGC Press Release (Round 3)
Tax relief now includes hotels, guesthouses, restaurants and travel agents (business activities) that are registered
with the GDT and have their business activities in Phnom Penh, Siem Reap, Preah Sihanouk, Kep, Kampot, Bavet
and Poi Pet. The monthly tax exemption was for three 3 months from March to May 2020. The taxpayers is still
required to submit the monthly tax returns and use the E-VAT filing for the monthly filing.
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4. Tax Incentives for the Restaurant Industry
Contributions to NSSF are not required during this period of employment suspension or the suspension of
business operations.
The Royal Government also urged Ministries, State institutions, and private owners of commercial buildings and
factories to avoid contract termination or evictions if tenants cannot afford their rental fee after the payment
due date and encouraged owners of commercial properties and factories to negotiate with their tenants on
delaying payment due dates and reducing fees for rental services.
RGC Press Release on May 26th, 2020 (Round 4)
The tax exemption that had been provided previously is extended for a period of two 2 months from June 2020
to July 2020.
For enterprises in the tourism sector who have suspended their operations, the suspension of monthly
contribution to the NSSF will be allowed to continue.
The renewal fees for all types of tourism licenses for year 2021 will be exempted. 4

5. Tax Incentives for the Restaurant Industry
RGC Press Release on July 31st 2020 (Round 5)
Monthly tax exemptions extended for 2 more months, August 2020 to the end of September 2020.
RGC Press Release on September 30th, 2020 (Round 6)
Monthly tax exemptions extended from October 2020 to the end of December 2020.
Exemption extended for Patent Tax payments and Signed-Board Tax, as well as the suspension on
comprehensive audits for 2020 from GDT.
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6. Tax Incentives for the Restaurant Industry
RGC Press Release on December 23rd, 2020 (Round 7)
Monthly tax exemptions extended from January 2021 to the end of March 2021.
The delay in the implementation of the NSSF pension scheme continues for another 6 months until
July 2021.
The obligation to make monthly contributions to the NSSF schemes during the business suspension
continues to be extended.
The exemption on making payment for the 2021 Patent Tax and paying the Signed-Board Tax for
tourism agents and other segments of the tourism sector will continue, however exempted taxpayers
still need to obtain the Patent Tax certificate.
Still required to file Annual Tax on Income Return for 2020 by 31 March 2021 however will be
exempted from having to pay taxes.
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7. Tax Incentives for the Restaurant Industry
RGC issued a press release on March 25th, 2021 (Round 8)
Monthly tax exemptions extended for three more months from April 2021 to the end of June 2021.
Instruction by the RGC to Ministries, State Institutions and the advice to private landlords of business
and factory premises to be flexible when dealing with tenants who are unable to pay their rent by the
due date and to avoid terminating the lease agreement or evicting tenants. The RGC encourages
landlords of tenants that run businesses and factories to negotiate in good faith with tenants to delay
rent payments and revisit the amount of rent that is being charged.
The exemption of the obligation to make monthly contributions NSSF during any period of business
suspension will continue to be extended.
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8. Tax Incentives for the Restaurant Industry
RGC Press Release June 29th, 2021 (Round 9)
Monthly tax exemptions extended for three more months to the end of September 2021.
The exemption of the obligation to make monthly contributions NSSF during any period of business
suspension continues to be extended.
Extension of the Implementation of the Pension Schemes for six more months until the end of
December 2021..
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9. Tax Incentives for the Restaurant Industry
What are the Incentives:
- Registered taxpayers whose business activity is 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 Siem are exempted from the payment of all monthly taxes.
- The exempted registered taxpayer is still obligated to complete and submit their monthly tax
returns and to continue to use the online system for the period of exemption. In addition the
taxpayers will still be required to file a annual Tax on Income return to the GDT.
- The exempted registered taxpayer must still act as a withholding tax agent with respect to third
party suppliers and employees. Withholding of salary tax from the employee and from suppliers,
who enter into a contract that is inclusive of WHT, is still required. Payment of these taxes is not
required, even though withheld.
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10. Tax Incentives for the Restaurant Industry
- VAT is still charged at 10% where applicable. VAT input from registered suppliers is still claimed,
however if during the tax exemption period the VAT output is higher than the VAT input, the
difference would not be paid to the GDT.
- Exempted registered taxpayers are not subject to a Comprehensive Tax Audit.
- Exemption for Patent Tax payments and Signed-Board Tax, for 2021 for tourism agents and other
segments of the tourism sector
- The delay in the implementation of the NSSF pension scheme.
- Renewal fees for all types of tourism licenses for year 2021 are exempted.
- Enterprises in the tourism sector who have suspended their operations are exempt from monthly
contribution to the NSSF.
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11. Tax Incentives for the Restaurant Industry
Small Taxpayers:
A small taxpayer is any sole proprietorship or partnership that:
Has annual turnover* from KHR 250 million (USD 62,500) to KHR 1,000 million (USD 250,000) for
agricultural, service and commercial sectors;
Has annual turnover from KHR 250 million (USD 62,500) to KHR 1,600 million (USD 400,000) for the
industrial sector;
Has had, or expects to have, turnover in any period of three consecutive calendar months**,
exceeding KHR 60 million (USD 15,000); and
Participates in any bidding or quotation for the supply of goods and services.
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12. Tax Incentives for the Restaurant Industry
A sole proprietorship or partnership that:
Has assets valued at KHR 200 million (USD 50,000) to KHR 1,000 million (USD 250,000) in the
agricultural, service and commercial sectors; and
Has assets valued at KHR 200 million (USD 50,000) to KHR 2,000 million (USD 500,000) for the
industrial sector.
Key Advantages:
- Charge 10% VAT but only pay 2% VAT to GDT
- No withholding tax paid except for rent
- Lower Profit tax tiers
- Tax Patent USD 100
- Simple tax filing forms (monthly and annual)
- Not prone to audits
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13. Tax Incentives for the Restaurant Industry
Can the Small Taxpayer Model be the “silver bullet” for restoring the Tourism Industry and
encouraging tax registration.
- Over 90% of businesses in the Kingdom are SMEs, they drive the economy.
- Foreigners should be allowed to register as Small Taxpayers
- The corporate status for Small Taxpayers should be expanded to Limited Liability Companies to
allow multiple investors
- Increase the turnover hurdle for Small Taxpayers to USD 500,000 for the industry
- The tax incentives (noted on previous page) will support the industry and provide investment
- Require a licensed tax agent to file so that it reduces under-declaration
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