Logo of Phnom Penh Post newspaper Phnom Penh Post - VAT at a glance

VAT at a glance

VAT at a glance

Value Added Tax (VAT) is a tax on the estimated value added to a product or raw material

at each stage of its manufacture.

The Cambodian VAT, inaugurated on January 1, 1999 , replaces a range of other taxes

such as the 4% Turnover Tax, 2% Importation Tax and 4% Sales Tax.

"VAT is designed to get the consumer to pay, but [allowing] the government to

get the revenue earlier," explains Craig Martin of Cambodia's British Business

Council.

Under Cambodia's VAT, companies that are charged VAT for raw materials can later

apply to the government for VAT refund.

"In principle [VAT] is good because it encourages businesses to keep paperwork

in order to get their [VAT] money back," Martin says.

Ideally, VAT encourages widespread business compliance by structurally penalizing

those companies who don't charge VAT.

"If you're operating in a gray area, you can't claim back 10 percent VAT,"

Martin explains. "The idea [of VAT] is to draw in non-paying [companies]."

However, Martin cautions that there remain doubts among the Cambodian business community

about the ability of the Cambodian government to reliably remit VAT refunds to compliant

companies.

"It's unclear whether [the government] will be able to meet its [VAT] payment

responsibilities," Martin warns

MOST VIEWED

  • Cambodia unveils new quarantine regulations

    The government has modified Covid-19 quarantine requirements, shortening the duration for, among others, Cambodian officials, foreign diplomats and delegations, investors and inbound travellers in general. According to an official notice signed by Minister of Health Mam Bun Heng late on October 16, quarantine length for Cambodian

  • Cambodia sets new Covid-19 quarantine rules

    The government has modified Covid-19 quarantine requirements, shortening the duration for, among others, Cambodian officials, foreign diplomats and delegations, investors and inbound travellers in general. According to an official notice signed by Minister of Health Mam Bun Heng late on October 16, quarantine length for Cambodian

  • Hun Sen: Cambodia set to fully reopen

    Prime Minister Hun Sen concludes that the October 5-7 Pchum Ben public holiday, during which many people either flocked to their hometowns for family reunion or gathered at tourist attractions across the country, has not caused an outbreak of Covid-19. In a special address to

  • Will Evergrande change the way Chinese developers do business in Cambodia?

    China’s property sector policy has exposed the grim financial condition of real estate developers including those operating in Cambodia, which raises questions over the viability of their projects and business going forward The dark blue netting draping over one of Yuetai Group Co Ltd’

  • Cambodia resumes issuance of tourist visas

    The Ministry of Foreign Affairs and International Cooperation has announced the resumption of its tourist visa and visa exemption programme after a long hiatus due to the Covid-19 pandemic. In a letter dated October 20 and addressed to foreign embassies and consulates, foreign minister Prak Sokhonn

  • Cambodia voted ‘world’s friendliest country’ in Rough Guides reader poll

    Cambodia ranked number one among the “World’s Friendliest Countries”, according to a reader poll conducted by London-based international website “Rough Guides”. Taking submissions through Twitter and Facebook, “Rough Guides”, a well-known travel agency and publisher of guidebooks, said the Kingdom “was by far the