Logo of Phnom Penh Post newspaper Phnom Penh Post - Employees’ seniority pay to be tax-free: GDT

Employees’ seniority pay to be tax-free: GDT

Content image - Phnom Penh Post
The General Department of Taxation. Post Staff

Employees’ seniority pay to be tax-free: GDT

The General Department of Taxation (GDT) on Thursday said back payments of seniority indemnity for Cambodian employees are tax exempt, while employers can also deduct the payments from their income taxes.

The GDT’s instruction circular, signed by Cambodian Minister of Economy and Finance Aun Pornmoniroth on April 11 and released on Thursday, also says that services in relation to recruiting, training, transporting and managing workers overseas by private agencies are exempt from value-added tax.

Ros Sokhom, managing director of auditing firm Rosoco Limited, on Thursday said the ministry’s circular clarifies conditions for employees who are set to receive the payment, as well as employers who will be paying, establishing that they are free from tax obligations.

“The benefit is going to be for Cambodian employees as they will receive the full amount of seniority payment without being required to pay tax,” he said.

Sokhom added that allowing the back payments of seniority indemnity to be deducted from employers’ current income taxes is a positive move as it reduces the company’s burden.

“The decision makes employees receive full benefits while it also reduces some of the burden for their employers,” he said.

Sokhom continued that it is too early to estimate how much revenue the government is set to lose from the tax exemption, but said it should not be excessive.

The Ministry of Labour and Vocational Training in September issued the prakas on seniority payment indemnity, instructing all employers to provide their employees with the security payments starting this year.

Seniority payments will be made twice per year, with the employer providing employees with a payment equal to 15 days per year of their wages, along with other benefits.

MOST VIEWED

  • Wing Bank opens new branch in front of Orkide The Royal along Street 2004

    Wing Bank celebrates first anniversary as commercial bank with launch of brand-new branch. One year since officially launching with a commercial banking licence, Wing Bank on March 14 launched a new branch in front of Orkide The Royal along Street 2004. The launch was presided over by

  • Girl from Stung Meanchey dump now college grad living in Australia

    After finishing her foundational studies at Trinity College and earning a Bachelor’s degree from the University of Melbourne in 2022, Ron Sophy, a girl who once lived at the Stung Meanchey garbage dump and scavenged for things to sell, is now working at a private

  • Ministry using ChatGPT AI to ‘ease workload’; Khmer version planned

    The Digital Government Committee is planning to make a Khmer language version of popular artificial intelligence (AI) technology ChatGPT available to the public in the near future, following extensive testing. On March 9, the Ministry of Post and Telecommunications revealed that it has been using the

  • Wat Phnom hornbills attract tourists, locals

    Thanks to the arrival of a friendly flock of great hornbills, Hour Rithy, a former aviculturist – or raiser of birds – in Kratie province turned Phnom Penh tuk tuk driver, has seen a partial return to his former profession. He has become something of a guide

  • PM urges end to ‘baseless’ international Ream base accusations

    Prime Minister Hun Sen urges an end to “baseless” foreign accusations surrounding the development of the Kingdom’s Ream Naval Base, as the US has consistently suggested that the base is being expanded to accommodate a Chinese military presence. Hun Sen renewed his calls while

  • EU’s Sokha resolution ‘a sovereign rights breach’

    The National Assembly (NA) said the European Parliament (EP) did not respect the Kingdom’s independence and sovereignty when it passed a resolution strongly critical of the recent conviction and sentencing of former opposition leader Kem Sokha for “treason”. On March 16, the EP issued a