THE Ministry of Economy and Finance has revised the tax rates for all business owners and employees in Cambodia. Employers were instructed to deduct employee taxes according to the new rates from February onwards. Taxpayers have to submit the tax declaration by the 20th of each month.
The notice implemented the new tax rates under Article 5 of the sub-decree dated on February 12.
The notice said: “All enterprises are subject to tax. Residents, the state institutions and organisations that have the obligation to withhold and pay tax on salaries have to implement the new rate for employee salaries from February onwards. They will have to submit the tax declaration letters on the 20th of each month.”
The revised tax rate on monthly salaries up to 1.3 million riel is zero, five per cent on salaries between 1.3 million riel to two million riel, 10 per cent on salaries between two million riel and 8.5 million riel, 15 per cent on salaries between 8.5 million riel and 12.5 million riel, and 20 per cent on salaries of more than 12.5 million riel.
The notice said civil servants, teachers, doctors and workers with children and spouses are allowed to reduce taxes based on salaries of 150,000 riel per month. Those making between 1.3 million riel and two million riel could be exempt from tax.
In the new Article 42 of the Taxation Law, the word “salary” refers to salaries, remuneration, allowances, premiums, overtime pay, compensation, and benefits paid to employees.
A similar notice was issued by the ministry on January 15, 2018, with different tax rates.
The 2018 notice announced tax rates of zero for a salary up to 12 million riel, five per cent on salaries between 1.2 million and two million riel, 10 per cent on salaries between two million riel and 8.5 million riel, 15 per cent on salaries between 8.5 million riel and 12.5 million riel, and 20 per cent on salaries of more than 12.5 million riel.