Additional Measures to Support Private Sector Workers & Revive the Post-COVID-19 Economy (Round 7) 

On 23 December 2020, the Royal Government of Cambodia (“RGC”) issued a press release and rolled out ‘Round 7’ of measures aimed at mitigating the impacts of COVID-19 on businesses and workers in Cambodia.

The RGC in their press release noted the positive update with respect to the development of a COVID-19 vaccine and the fact that Cambodia has to date managed to effectively control COVID-19. The RGC made the point that without 100% clarity about the safety, quality and effectiveness of the vaccine and the issues faced by countries with respect to the transportation and storage of the vaccine that there is still a great deal of risk around potential future COVID-19 outbreaks meaning that Cambodia cannot return to normalcy immediately.

With that in mind the RGC has extended previous COVID-19 measures which are summarized below:

1. Further measures to support garment, textile, footwear, travel products and bags sectors

The RGC will continue to implement measures that provide aid to suspended employees and workers in certain segments of the private sector. This includes those in the garment, textile and footwear (“GTF”) sectors, as well as certain segments of the tourism sector, that are registered with the Department of Labour and Vocational Training (“DLVT”), the Ministry of Commerce (“MOC”), the General Department of Taxation Cambodia (“GDT”) and, where applicable, the Ministry of Tourism (“MOT”).

Those suspended workers, subject to their current status being certified with appropriate documentation, will continue to be eligible to receive government subsidies of USD 40 per month for a further period of three months, until the end of March 2021. An additional USD 30 per month contributed by the factories and enterprises will be available to GTF sector workers (amounting to a total of USD 70 per month for such workers).

Hotel, guest house, restaurant and tourism workers will be eligible to receive USD 40 per month for a further period of three months, until the end of March 2021. In addition to the Government subsidies, enterprises and businesses in the tourism sector may provide financial contributions to their employees on a voluntary basis or subject to their financial capacity.

In addition:

  • monthly tax exemptions that had been provided to hotels, guesthouses, restaurants and travel agents registered with the GDT that operate in Phnom Penh, Siem Reap, Preah Sihanouk, Kep, Kampot, Bavet or Poi Pet will be extended for three more months (from January 2021 to the end of March 2021) – these business still have an obligation to submit their tax returns and use E-VAT every month during the exemption period;
  • The delay in the implementation of the NSSF pension scheme will continue for another 6 months until July 2021,
  • the obligation to make monthly contributions to the National Social Security Fund (“NSSF”) for occupational risk and healthcare schemes during the business suspension will continue to be extended;
  • The exemption on making payment for the 2021 Patent Tax and paying the Signed-Board Tax for tourism agents and other segments of the tourism sector will continue. However please note that for those tourist sector taxpayers that are exempted from making the 2021 Patent Tax payment they will still need to obtain the Patent Tax certificate for 2021 from the General Department of Taxation (GDT);
  • For registered taxpayers in the tourism sector such as hotels, guesthouses, restaurants and travel agents that carry out business activities in Phnom Penh, Siem Reap, Preah Sihanouk, Kep, Kampot, Poipet and Bavet they are still required to file their Annual Tax on Income Return for 2020 by 31 March 2021 however they will exempted from having to pay taxes. 

2. Further measures to support aviation sectors 

  • The Minimum Tax exemption provided to all airline entities operating in Cambodia will be extended for three more months (January 2021 to the end of March 2021).
  • There will be a delayed due date with respect to the payment of aviation fees by airline entities operating in Cambodia for a further period of three months until the end of March 2021 with the permission for those airline entities to settle those payables via installment after the suspension period.

3. Measures to help businesses as well as to help support the livelihood of workers

  • For employers in all businesses the exemption to make seniority payments accrued prior to 2019 and current seniority payments (for 2020 and 2021) will continue until 2022. If the economic and social situation in Cambodia improves during 2021 there may be discussions between the relevant Government ministries and employers to determine procedures to re-instate installment payments for the historical accrued and ongoing seniority payment obligations.

4. Registration Tax – Housing

The 4% Stamp Duty that applies on the transfer of immovable property in Cambodia will continue to be exempted on the transfer of residential property that is valued equal to or at less than USD70,000 for the period from January 2021 to December 2021 provided the following criteria is met:

  • The transfer of ownership or right to possess of the property, having a value equal to or lower then USD 70,000  (based on market value and stated in a sale and purchase agreement) is effected from February 2020 to December 2021;
  • The transfer of ownership or right to possess of the immovable property must be from a developer that is registered with the MEF and Department of Economy and Finance; and
  • All developers must prepare a correct sale and purchase agreement for the property based on the market price. If necessary, the GDT can audit the developers to ensure that the selling price of the property is based on the market price.
5. Withholding Tax reduction for Cambodian Financial Institutions

For Cambodian financial institutions (banks and MFI’s) that obtain financing whether from domestic or offshore lenders, the applicable withholding tax rate (“WHT”) on interest payments will continue to be revised.

For new loans, the WHT rate in respect of loans from both domestic and offshores sources (including those from both Double Tax Agreement (“DTA”) countries and non-DTA countries) will be reduced to 5% for 2021 and 10% for 2022 respectively. The standard WHT rates will apply from 2023 onwards.

For existing loans held by Cambodian financial institutions, the WHT rate will continue to be reduced to 10% for 2020 and 2021.

6. Financial support program for poor and vulnerable families

The program to provide cash benefits to poor and vulnerable families that were hit particularly hard during the COVID-19 pandemic is extended by three more months (January 2021 until the end of March 2021).

All relevant ministries are directed to implement these instructions immediately, efficiently and without delay.

The RGC will continue to monitor the COVID-19 situation along with the economic and financial climate both locally and globally, in order to assess and take action where necessary to ensure the welfare of all priority sectors of the Cambodia economy. This is in keeping with the RGC’s aims to stabilize and revitalize the national economy and restore economic growth as the effects of the COVID-19 pandemic gradually begin to subside.



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