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Cambodia Investment Update for August 2016 


Published: August, 2016

Submission: September, 2016



Notifications No. 12723 dated 5 August 2016 & No. 13466 dated 16 August 2016

Per Notification No. 12723, the General Department of Taxation (“GDT”) informs owners of immovable property (“Property”) which is subject to the Immovable Property Tax (“IPT”) to pay the IPT to the tax authorities by 30 September 2016. Late payment of IPT is subject to penalty.

In addition, the GDT issued Notification No. 13466 to provide further guidance on how to pay the IPT for the year 2016 as follows:

  1. For Property for which IPT was paid in previous years and where the information of that Property remains unchanged in 2016, the Property owner can pay the IPT at tax branches (provincial or khan tax branches), or at branches of Canadia Bank and Acleda Bank by attaching the IPT payment receipt from the previous year (2015).
  1. For Property for which IPT was paid in previous years and where the information of that Property has changed with respect to an addition, deduction or demolition of the building size, separation or consolidation of land titles and change of ownership/occupant in 2016, the Property owner is required to contact the tax administration where the Property is located to update the Property information and to provide evidence/documents with respect to the change to the tax administration.
  1. For new Property for which IPT has not been paid or not registered in the tax administration’s system, the Property owner must contact the tax branches (i.e. provincial or khan tax branches) where the Property is located in order to register or update the registration of the Property for IPT purposes and attach the following documents:
  • ID Card or Birth Certificate or Passport of the Property owner(s);
  • Residence Book or Family Book or Residency Letter of the Property owner(s);
  • Certificate of Immovable Property Possession, Certificate of Immovable Property Ownership or Letter of Immovable Property Possession;
  • Sale and purchase agreement in case the Property was purchased on credit with installation payments; and
  • Water and electricity bills.

Property owners can update Property information by completing Form PT 01 and submitting the above documents. IPT Identification Cards are available and issued by the tax branches (provincial or khan tax branches) or at any branches of Canadia Bank or Acleda Bank by paying KHR 5,000 per card.

Prakas No. 904 dated 8 August 2016 issued by the Ministry of Economy and Finance (“MEF”)

This Prakas, implemented from 8 August 2016, provides tax incentives for the educational sector. The tax incentives encompass Tax on Profit (“TOP”), Withholding Tax (“WHT”) and Value Added Tax (“VAT”) which are applicable to educational establishments. Educational establishment is defined to cover public and private educational establishments that solely provide educational service from kindergarten to higher education. It also includes technical and vocational training establishments.

Tax incentives provided to all educational establishments are:

  • Suspension of paying the 1% Minimum Tax until the end of the year 2018.
  • Suspension of paying the 1% Prepayment of Profit Tax until the end of the year 2018.
  • Payment of the TOP only if there is a taxable profit.
  • Grant of scholarship (i.e. free of charge or discounts) is not taxable revenue for TOP calculation purposes.
  • 15% WHT exemption on payment in cash or in kind on management or consultation services or similar services which are directly connected to education of students.
  • 14% WHT exemption on payment for management and technical services which are directly connected to education of students.
  • Educational services and other supplies of goods and services to serve education that also include catering and accommodation provided to students are non-taxable supplies (i.e. not subject to 10% VAT). VAT inputs paid by educational establishments for non-taxable supplies may not be creditable, but are a deductible expense for TOP purposes.

Educational establishments are subject to the following taxes and obligations:

  • Collecting and remitting resident WHT on payments of rent of movable or immovable property, royalty, interest and services including construction, engineering, architecture and other services which are not directly connected to education of students.
  • Collecting and remitting non-resident WHT on payments of interest, royalty, rent, dividend and any incomes connected to use of property.
  • Collecting and remitting the Tax on Salary.
  • Other applicable taxes based on the tax regulations.
  • Registering with the tax administration.
  • Submitting monthly and annual tax returns to the tax administration and paying taxes on a timely basis.
  • Keeping proper accounting documents based on applicable regulations.
  • Submitting audited financial statements, which have been audited by an independent auditor, to the tax administration for educational establishments which have annual turnover from KHR 2,000 million (approx. USD 500,000).


Prakas No. 341 of the Ministry of Labour and Vocational Training (“MLVT”), dated 10 August 2016

The MLVT issued Prakas 341 to re-determine the separation of regulatory authority between the MLVT and the Department of Labour and Vocational Training in Phnom Penh (“DLVT”) over enterprises located within Phnom Penh. Pursuant to Prakas 341, enterprises listed in the annex of the prakas (approximately 2,000 enterprises) are to be under the supervision of the MLVT, whereas other enterprises not listed in the same annex are to be under the supervision of the DLVT.

This prakas abrogated the previous Prakas 185 on the Determination of Supervision on Employees in Small and Medium Sized Enterprise Located in Phnom Penh, dated 28 August 2008, which used the total number of employees of an enterprise as the criteria to determine whether an enterprise was under the supervision of the MLVT or DLVT.

Under Prakas 341, regardless of the total number of employees, each existing enterprise located in Phnom Penh which is listed in the annex of the prakas is under the supervision of the MLVT. All others are under the supervision of the DLVT. If that annex indicates a change of regulatory authority from DLVT to MLVT, the enterprise must transfer its labour registration matters from the DLVT to the MLVT. Prakas 341 does not, however, specify the procedure for accomplishing such a transfer.

Separately, each newly established enterprise engaged in any of the following nine sectors will fall under the regulatory supervision of the MLVT: (1) garment, textile and footwear manufacturing; (2) industry; (3) companies that recruit workers to work abroad; (4) NGOs; (5) construction; (6) hotels; (7) banking; (8) aviation; and (9) maritime.

Prakas No. 352 of the Ministry of Labour and Vocational Training (“MLVT”), dated 17 August 2016

The MLVT has introduced, in Prakas 352, the Foreign Workers Centralized Management System to manage the employment of foreign employees in Cambodia through an online system. The online system will be implemented through the website (www.fwcms.mlvt.gov.kh) and is expected to be launched on 1 September 2016.

Employers are required to complete the formalities to request approval of foreign employee quota through the new online system from 1 September 2016. Likewise, any foreigner who comes to work in Cambodia is also required to complete the formalities to apply for an employment card and work book through the new online system from 1 September 2016. In some cases, the MLVT or DLVT may request an applicant to be present in person at the MLVT or DLVT or to provide other necessary documents. With the new online system, an applicant is required to pay an online fee of USD 30 per application in addition to the official filing fee.

Under Prakas 352, a foreigner may now use his/her valid personal health certificate to apply for a foreign employment card and work book. This health certificate must be certified by the Labour Medical Department of the MLVT (with an official fee of USD 5). It is expected that further specific requirements regarding application via online system will be released once the website is launched.


Letter No. 410 of the Ministry of Health, dated 21 July 2016

This letter, which refers to previous Letter No. 340 of the Ministry of Health, dated 15 June 2016, reiterates and emphasizes the regulatory restrictions against certain establishments and non-pharmacists selling prescription pharmaceuticals. With a stated intention of strengthening proper use of prescription pharmaceuticals, the display and sale of such products in private hospitals, polyclinics, inpatient clinics, and medical consultation and care rooms is prohibited except where there is a pharmacy and pharmacist present at such facilities. This letter also addresses issues of proper storage of prescription pharmaceuticals.


Notice No. 292 of Ministry of Tourism, date 08 August 2016

By Notice No.292, the Ministry of Tourism launched a new online system to register tourism-related businesses and tour guides who are required to have a license. The aim of this new system is to reduce barriers for the private sector. To submit online tourism applications and supporting documents, applicants can visit www.cambodiatourismindustry.org and make a payment of the tourism license fee by Wing.

DFDL contact:
Alex Larkin
Senior Consultant
[email protected]

*The information provided is for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.






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