Cambodia Investment Review
DFDL Cambodia hosted a flagship event at the Hyatt Regency Phnom Penh, titled “Navigating the Evolving Tax Landscape in Cambodia.” The ‘Tax Connect’ forum brought together over 300 participants from the local and international business communities to discuss recent updates in Cambodian tax regulations, including the newly introduced Standard Operating Procedures (SOP) for tax audits.
Stay up-to-date with the latest tax and legal news via DFDL Cambodia Telegram Channel here.
The seminar featured prominent speakers, including Mr. Clint O’Connell, Partner and Head of Cambodia Tax and Accounting Practice at DFDL Cambodia, and H.E. Mrs. Bun Neary, Deputy Director-General of the General Department of Taxation (GDT). The event aimed to provide stakeholders with critical updates on tax regulations, transfer pricing, and tax audit procedures in Cambodia.
Key Discussions and Insights
H.E. Mrs. Bun Neary opened the seminar with a keynote speech, emphasizing the importance of understanding and complying with the evolving tax regulations in Cambodia. She underscored the seminar’s objective to update stakeholders on the latest developments and acknowledged the contributions of key speakers who provided valuable insights into various tax-related topics.
The discussions at the seminar covered several critical areas:
- Implementation of Tax Policies: The session addressed the recent changes in tax policies related to share transfers and transfer pricing, highlighting the need for businesses to stay informed and compliant with these regulations.
- GDT’s Guidelines on Tax Audit Procedures: Detailed insights were provided on the GDT’s guidelines for tax audit procedures, emphasizing the importance of adherence to the new SOP for tax audits.
- International Tax Agreements (DTAs): An overview of Cambodia’s international tax agreements was given, explaining their implications for Cambodian businesses. The country has signed DTAs with 11 countries, including Singapore, Thailand, China, and Japan, and is in negotiation with seven more countries.
Government Initiatives
The seminar also highlighted the Cambodian government’s efforts to enhance tax administration and international cooperation. Reforms such as the GDT e-Administration system have been introduced to streamline tax administration, improve compliance, and promote transparency. These initiatives are part of the broader effort to make Cambodia’s tax system more efficient and business-friendly.
A focal point of the seminar was the introduction of the new SOP for tax audits, officially presented at the event. The SOP aims to streamline tax audit processes, improve transparency, and foster a professional and consistent approach among tax officers and taxpayers.
The Cambodian tax system operates on a self-assessment basis, where taxpayers are responsible for calculating, declaring, and paying their taxes in accordance with the Law on Taxation. The SOP was developed to clarify the roles, responsibilities, and workflows involved in tax audits, thereby avoiding overlapping and repeated audits.
Development Process
The SOP was developed through a collaborative process involving the Ministry of Economy and Finance (MEF), the General Department of Taxation (GDT), and the private sector. The process began in October 2023 with initial meetings and draft preparations, followed by consultations and revisions in the subsequent months. The final draft was approved on March 29, 2024.
The SOP categorizes tax audits into two main types: Desk Audits and Onsite Audits. Desk Audits are conducted at the tax administration office and involve reviewing and verifying tax returns that exhibit irregularities. Onsite Audits are more comprehensive and are divided into Limited Audits and Comprehensive Audits, each focusing on different aspects and timelines of tax assessment.
Rights and Obligations
The SOP outlines the rights and obligations of both tax officers and taxpayers. Tax officers are required to maintain professionalism and integrity, avoiding conflicts of interest and conducting their duties transparently. Taxpayers are obliged to cooperate with the tax administration by providing necessary documents and information, and they are entitled to clear explanations and updates on the audit process.
The implementation of the SOP will be overseen by the GDT’s Tax Audit and Tax Crime Investigation Committee. Mechanisms are in place for reporting and handling complaints from both tax officers and taxpayers to ensure adherence to the SOP.
The DFDL Cambodia seminar successfully provided participants with valuable insights into the evolving tax landscape in Cambodia. The introduction of the new SOP for tax audits represents a significant step towards improving the transparency and efficiency of the tax administration system, ultimately contributing to a more favorable business environment in Cambodia. The seminar underscored the importance of staying informed about regulatory changes and the ongoing efforts to enhance the country’s tax framework.
Stay up-to-date with the latest tax and legal news via DFDL Cambodia Telegram Channel here.
