Logo of Phnom Penh Post newspaper Phnom Penh Post - Government prakas fixes unclear law on taxes

Government prakas fixes unclear law on taxes

Government prakas fixes unclear law on taxes

The Ministry of Economy and Finance (MEF) published a prakas yesterday that clearly defines the government’s laws for nontaxable supplies that receive a VAT exemption on primary financial services – a move that industry insiders claim gives more clarity to businesses.

Prior to the prakas, primary financial services were loosely defined and difficult for businesses to enact when meeting their tax obligations. Now, five financial activities have been identified that fall into the 10 percent VAT exemption territory.

These five services, listed into subsectors, include deposit, loan and credit activity; initial public offering (IPO) and trading related to the Cambodian Securities Exchange (CSX); money exchange; pawn brokers; and gold trading, providing it is not used for jewellery production.

Clint O’Connell, head of tax practice for foreign investment advisory and tax firm DFDL Cambodia, said the announcement provides assurances for registered taxpayers and businesses looking to invest in Cambodia that they will not be required to charge the 10 percent VAT on these activities.

“This will benefit those businesses who may have been unsure as to whether what they were doing fell under one of the categories of a non-taxable supply,” he said.

In Channy, president of Acleda Bank, said that while VAT exemption had been applied for some time by MEF, it was not until now that the government explicitly said in writing what primary financial services were.

While he said the announcement does not change current operations by financial institutions, it makes meeting the tax obligation “clearer and easier to achieve”.

MOST VIEWED

  • Hong Kong firm done buying Coke Cambodia

    Swire Coca-Cola Ltd, a wholly-owned subsidiary of Hong Kong-listed Swire Pacific Ltd, on November 25 announced that it had completed the acquisition of The Coca-Cola Co’s bottling business in Cambodia, as part of its ambitions to expand into the Southeast Asian market. Swire Coca-Cola affirmed

  • Cambodia's Bokator now officially in World Heritage List

    UNESCO has officially inscribed Cambodia’s “Kun Lbokator”, commonly known as Bokator, on the World Heritage List, according to Minister of Culture and Fine Arts Phoeurng Sackona in her brief report to Prime Minister Hun Sen on the night of November 29. Her report, which was

  • NagaWorld union leader arrested at airport after Australia trip

    Chhim Sithar, head of the Labour Rights Supported Union of Khmer Employees at NagaWorld integrated casino resort, was arrested on November 26 at Phnom Penh International Airport and placed in pre-trial detention after returning from a 12-day trip to Australia. Phnom Penh Municipal Court Investigating Judge

  • Sub-Decree approves $30M for mine clearance

    The Cambodian government established the ‘Mine-Free Cambodia 2025 Foundation’, and released an initial budget of $30 million. Based on the progress of the foundation in 2023, 2024 and 2025, more funds will be added from the national budget and other sources. In a sub-decree signed by Prime Minister Hun Sen

  • Two senior GDP officials defect to CPP

    Two senior officials of the Grassroots Democratic Party (GDP) have asked to join the Cambodian People’s Party (CPP), after apparently failing to forge a political alliance in the run-up to the 2023 general election. Yang Saing Koma, chairman of the GDP board, and Lek Sothear,

  • Cambodia's poverty cut in half from 2009 to 2019: World Bank report

    A report published by the World Bank on November 28 states that Cambodia’s national poverty rate fell by almost half between 2009 and 2019, but the Covid-19 pandemic recently reversed some of the poverty reduction progress. Cambodia’s poverty rate dropped from 33.8 to 17.8 per cent over the 10