Logo of Phnom Penh Post newspaper Phnom Penh Post - Japanese firms raise investor tax concerns with GDT

Japanese firms raise investor tax concerns with GDT

Content image - Phnom Penh Post
JBAC president Yogo Kanda (third-left) during a meeting with GDT director-general Kong Vibol (centre) on March 17. SUPPLIED

Japanese firms raise investor tax concerns with GDT

The Japanese Business Association of Cambodia (JBAC) has publicly raised to the General Department of Taxation (GDT) issues faced by Japanese investors concerning the calculation of income tax for foreign employees of their members’ representative offices and tax on additional benefits.

JBAC president Yogo Kanda said during a meeting with GDT director-general Kong Vibol on March 17 that the association noted there had been “gaps” in tax declaration, which they believe should have been audited to “determine the taxation of additional benefits on their payroll”.

The representative office of a Japanese company and member of the association requested clarification from the GDT regarding the procedure for adjusting the tax calculation of the salary of foreign employees.

Vibol clarified that there are two options for the Japanese representative office: the first option would be to adjust the salary tax base and tax return, and pay the tax on the additional salary, free from penalty. The second would be to pay tax on the additional benefits that have been recalculated by auditors, after which the GDT director-general will help facilitate a waiver from the Ministry of Economy and Finance.

In relation to the tax on additional benefits, GDT noted that JBAC “saw it as a double tax”. But Vibol said the GDT had, in fact, asked the association to prepare a letter of appeal adjusting the tax setting for the benefits and to “prepare additional guidelines regarding the determination of the tax base for the benefit” to prevent the issue from happening again.

Vibol subsequently sought to assuage investors on the issue, saying that concerns and problems of Japanese companies have “always been discussed and addressed through good cooperation between the GDT and JBAC”.

“Previously, Japanese investors have always tried to understand clearly the laws and regulations on taxation, and have had high compliance to the tax laws of Cambodia,” he said.

Kanda said that JBAC accepted the response of the GDT and promised to “better address” past deficiencies. He requested the “continued support” of the GDT in announcing and clarifying new regulations, especially with regards to provisions on the rules and procedures for applying value-added tax (VAT) to e-commerce transactions and how they relate to JBAC members in particular.

He added that the association “will seek to encourage Japanese investors to fulfil their tax obligations in accordance with the tax law in force”.

The GDT and JBAC have jointly said that they will continue to cooperate in “sharing information and providing better tax services” in a bid to minimise such issues in the future.

In response to JBAC’s request, the GDT said it will be holding a workshop with association members on the implementation of VAT on e-commerce transactions.


  • Ice cream, noodles flagged over carcinogen

    The General Department of Customs and Excise of Cambodia (GDCE) has identified three types of instant noodles and ice cream trademarks originating from Thailand, Vietnam and France that are suspected to contain ethylene oxide, which poses a cancer risk to consumers. The general department has

  • Exclusive interview with Josep Borrell Fontelles, High Representative of the EU

    CAMBODIA is hosting the 55th ASEAN Foreign Ministers’ Meeting (AMM) and Related Meetings this week with top officials from the US, China, and Russia and other countries in the region slated to attend and to meet with face-to-face with their counterparts on the sidelines. In

  • Rise in Thai air routes to Siem Reap fuels travel hopes

    Local tourism industry players are eager for regional airline Bangkok Airways Pcl’s resumption of direct flight services between the Thai capital and Siem Reap town on August 1 – home of Cambodia’s awe-inspiring Angkor Archaeological Park – which is expected to boost the growth rate of

  • ASEAN Foreign Ministers’ meet commences, Taiwan issue possibly on table

    The 55th ASEAN Foreign Ministers’ Meeting (AMM) and related meetings hosted by Cambodia kicks off in Phnom Penh on August 3, with progress, challenges, and the way forward for the ASEAN Community-building on the table. Issues on Taiwan, sparked by the visit of US House Speaker

  • Angkor lifetime pass, special Siem Reap travel offers planned

    The Ministry of Tourism plans to introduce a convenient, single lifetime pass for foreign travellers to visit Angkor Archaeological Park and potentially other areas. The move is designed to stimulate tourism to the culturally rich province of Siem Reap as the start of the “Visit

  • Recap of this year’s ASEAN FM meet and look ahead

    This year’s edition of the ASEAN Foreign Ministers’ Meeting (AMM) hosted by Cambodia comes against the backdrop of heightened global tensions and increasing rivalry between major powers that have been compared to the animosity of the Cold War era. The following is The Post’