Cambodia Investment Review
The Private Sector Working Group D (PSWGD) convened on March 13, 2025, at the Cambodia Chamber of Commerce to address ongoing and emerging tax-related issues impacting the business community. The meeting provided an update from the Technical Working Group on Tax (TWG) and served as a platform for the private sector to raise new concerns with the General Department of Taxation (GDT), according to a post from the Cambodia Chamber of Commerce.
Updates from the Technical Working Group on Tax
The TWG presented several new and ongoing tax issues raised with GDT, reflecting the complexities faced by businesses across various sectors.
Among the newly submitted issues, the American Chamber of Commerce in Cambodia (AMCHAM) highlighted concerns over advertising billboard taxes. Members reported that multiple separate authorities are imposing taxes on advertising billboards, creating confusion and duplicative tax burdens. AMCHAM also raised the issue of the broad definition of advertising, arguing it extends beyond the original spirit of the tax law.
Read More: Private Sector Working Group-D Addresses Key Tax Issues in February 2025 Meeting
Additional concerns brought forward by the TWG include the Value Added Tax (VAT) obligations for small taxpayers, specifically targeting travel agents and tour operators, as well as the recognition of taxable income and income tax obligations for small taxpayers implementing simple accounting practices.
In terms of ongoing issues, the TWG reported continued discussions on several matters, such as the taxation of fringe benefits and withholding tax paid on behalf of others, the treatment of outside border sales, and the credit note function of withholding tax in the e-filing system—an issue specifically highlighted by EFG (Cambodia) Co., Ltd.
Further unresolved topics include:
- The accumulation and correction of accrued expenses and income records
- The non-recognition of discounts as revenue reductions
- The treatment of bad debts as non-deductible expenses
- Uncertainty surrounding the taxability of share premiums
- Taxation issues faced by logistics companies and customs clearance agents
- The application of 1% prepayment tax on income based on the selling price for distributors
- Clarification on deemed salaries for company directors
- Taxation of zero-interest loans
- Tax obligations incurred before formal registration at GDT
- Issuance of debt collection letters by the Tax Arrears Bureau
- VAT treatment of dental services
- Procedures for taxpayer reclassification under the self-declaration regime
- Suspension and cancellation of VAT certificates
New and Ongoing Sector Concerns
The Cambodian Federation of Employers and Business Associations (CAMFEBA) raised a new issue relating to the payment of wages prior to maternity leave, seeking clarity on compliance with tax and labor regulations.
Additionally, the Association of Tobacco Industry of Cambodia (ATIC) reiterated concerns over the potential increase in excise taxes on tobacco products. The industry flagged this issue as ongoing and emphasized the need for careful consideration due to potential impacts on the sector.
White Book 2021-2024 Published
The meeting also marked the formal announcement of the publication of the White Book 2021-2024 by the International Business Chamber of Cambodia (IBC). This document compiles the collective viewpoints, discussions, and proposals of PSWGD members aimed at improving Cambodia’s business environment.
The updated edition traces the group’s engagement and policy recommendations from July 2021—when Mr. Arnaud Darc assumed the role of Co-Chair—through September 2024. It serves as a record of private sector proposals submitted to the Royal Government to enhance the ease of doing business in Cambodia.
The White Book is available via the IBC website: https://ibccambodia.com/gpsf-intro/.
Recognition of Contributions and Next Steps
The PSWGD acknowledged the valuable contributions of Mr. Arnaud Darc, IBC Vice-Chairperson and Co-Chair of Working Group D on Law, Tax, and Governance, and Oknha Lim Socheat, IBC ExCom member and Co-Chair of the Technical Working Group on Tax. Both were recognized for their dedicated efforts and collaborative leadership in advancing public-private sector dialogue.
The IBC Secretariat announced that the next PSWGD meeting is scheduled for Thursday, April 10, 2025, with a focus on addressing new private sector issues and continuing efforts to improve tax administration and the overall business climate in Cambodia.
The PSWGD expressed appreciation to all private sector participants for their engagement and contribution to these critical discussions.
