SIGNIFICANT DEVELOPMENTS
There have been no significant tax or regulatory developments in individual taxation in the past year.
TERRITORIALITY AND RESIDENCE
There is no personal income tax per se in Cambodia. Instead, a monthly salary tax is imposed on individuals who derive income from employment.
General consulting income is excluded from salary tax but is subject to tax on profit (although rules exist that may deem certain consultants as employees).
Cambodian salary tax rules follow internationally familiar residency and source principles. A Cambodian resident’s worldwide salary is subject to Cambodian salary tax, while nonresidents are taxed on Cambodian-source salary.
Residents are persons domiciled in or having a principal place of abode in Cambodia or present in Cambodia for more than 182 days in a calendar year.
GROSS INCOME
Employee gross income/ A distinction is made between cash salary and fringe benefits.
Cash salary includes remuneration, wages, bonuses, overtime, and compensation paid for fulfilling employment activities. Employer-provided loans and advances are also considered cash salary.
Fringe benefits include the following.
1.Accommodation support, including payment of utilities and domestic helpers.
2.Education assistance (unless employment related.)
3.Provision of motor vehicles (presumably for private use).
4.Low-interest loans and discounted sales.
5.“Excessive or unnecessary” cash allowances, social welfare, and pension contributions.
6.Certain insurance support.
7.Entertainment or recreational expenditures (which may additionally be nondeductible to the provider for tax-on-profit purposes).
Exempt salary includes the following
1.Certain redundancy payments.
2.Reimbursement of employment-related expenses.
3.Certain uniform entitlements.
4.Certain travel allowances.
5.Salaries of employees of approved diplomatic, international, and aid organizations.
6.Salaries of nonresidents where the salary cost is not deducted in Cambodia for tax-on-profit purposes.
DEDUCTIONS
These are limited to small amounts for employee dependents and for repayment of employer loans or advances.
TAX CREDITS
Taxes paid by resident taxpayers on foreign-source salary will be allowed as a credit against Cambodian salary tax on presentation of documentation confirming payment. The credit allowed is the lower of foreign tax paid or the proportion of salary tax on salary from all sources attributable to the
foreign-source income.
OTHER TAXES
Social security taxes and local taxes on income/There are no such taxes at present.
Tax administration
Returns/Employers must submit to the tax authorities, together with the payment of tax withheld, a monthly tax declaration for the withholding tax on salary. There is no employee annual return.
Payment of tax / Employers must deduct salary tax from employees’ salaries in accordance with the tax tables on a pay-as -you-earn basis. The tax withheld must be paid to the tax authorities not later than 15 days after the end of the month in which the salaries were paid. Late payments are subject to penalties.
TAX RATES
The monthly cash salary of residents is taxed at the following rates.
Taxable income Tax on Percentage
Over Not over Column 1 on excess
(Column 1)
0 CR 50
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