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

  • Cambodia’s image problem

    In opening remarks at a recent event, Secretary of State at the Ministry of Foreign Affairs and International Cooperation Luy David said information can be a double-edged sword. He told a European Institute of Asian Studies (EIAS) briefing seminar that the media has unfairly presented

  • PM Hun Sen says dangers averted

    Delivering a campaign speech from his home via Facebook Live on Thursday, caretaker Prime Minister Hun Sen said his Cambodian People’s Party (CPP) had carried the country through danger in its latest mandate. He was specifically referring to the threat of a “colour revolution”

  • Bumpy road for local ride apps

    Ride-hailing services seem to have grown into a dominant player in the capital’s transportation sector. Relatively unknown and little used in the Kingdom at the beginning of this year, services like PassApp, Grab and ExNet are now commonplace on Phnom Penh streets. However, the

  • Hun Sen lays out party’s platform

    Caretaker Prime Minister Hun Sen on Wednesday credited liberating Cambodia from the Khmer Rouge as among the reasons why people will vote for his ruling Cambodian People Party (CPP) in the July 29 national elections. Hun Sen, who has held the reins of power in Cambodia