The standard tax year is the calendar year, although different accounting year-ends may be granted upon application.
The return for annual tax (i.e. CIT or MT) is to be filed annually, within three months of tax year-end.
Returns for monthly taxes (e.g. 1% prepayments of CIT, WHT, ToS or ToFB, SPT, and accommodation tax) are to be filed monthly, within 20 days of the following month. The deadline will be extended to the next working day if the 20th day falls on a Saturday, Sunday, or public holiday.
Payment of tax
CIT or MT is due for payment three months after tax year-end. The CIT or MT liability can be reduced by prepayment of CIT payments.
Monthly taxes are due for payment by the 20th day of the succeeding month. The deadline will be extended to the next working day if the 20th day falls on a Saturday, Sunday, or public holiday.
Prepayment of CIT
A prepayment of CIT equal to 1% of monthly turnover inclusive of all taxes, except VAT, is required to be paid on a monthly basis. The prepayment can be offset against the annual CIT liability and the MT.
Where a taxpayer is in the period of CIT holiday, the taxpayer is also exempted from the prepayment obligations. However, a nil monthly return will need to be lodged.
Where a taxpayer is not subject to MT, a monthly prepayment of CIT must still be made. However, unutilised prepayments from a prior year can be used to offset the current amount due, and no physical payment may be required.
Tax audit process
There are two types of tax audit in Cambodia (i.e. limited and comprehensive tax audits). Initially, the tax authorities will send a notification letter to the taxpayer informing them of a tax audit. During the tax audit process, tax auditors visit the taxpayers’ office to review the documents and discuss any potential tax issues with the taxpayers and may request supporting evidence. After the visit to the taxpayer’s office, the tax auditors issue a notice of tax reassessment (NoTR), which indicates the reassessed tax liabilities and the basis of their tax reassessment. If the taxpayers agree with the reassessed tax liabilities, they can proceed with the payment. If not, the taxpayers have to submit an objection letter to the tax authorities within 30 days of the receipt of the NoTR.
Statute of limitations
The tax audit period (i.e. the limitation of the period within which the tax authorities can perform tax audits) is as follows:
- Within three years of the date of submission of the tax returns.
- Within ten years of the date of submission of the tax returns if there is any evidence of 'obstruction of the implementation of laws'.
- Any time with the written consent of the taxpayers.
In practice, the GDT regularly extends the time limit for tax audit up to ten years.
Topics of focus for tax authorities
In practice, the tax authorities focus the tax reassessment on various matters, including payment to third parties overseas, fringe benefits provided to employees, and related party transactions (e.g. payment of management fee to head office, loans from shareholder).