he Tax on Profit is the debt of a resident taxpayer on income from Cambodian sources and from foreign sources. For a non-resident taxpayer, this tax is assessed on income from Cambodian sources only.
The rates of the Tax on Profit:
The tax rates on the annual profit are as follows:
- 20 percent for the profit realized by a legal person.
- 30 percent for profit realized under an oil or natural gas production sharing contract and the exploitation of natural resources including timber, ore, gold, and precious stones.
- 9 percent for the profit of qualified investment project approved by CDC to be entitled to the 5 year transitional period commencing from the tax year after the date of the promulgation of the Law on the Amendment of the Law on Investment of the Kingdom of Cambodia.
- 0 percent for the profit of qualified investment project during the tax exemption period as determined by CDC.
- According to the progressive tax rate by tranche for the table below for the profit realized by the physical person and the distributive share to each member of a pass-through that is not classified as a legal person.
Parts of the annual taxable profit Tax rate From 0 to 6,000,000 Riels 0% From 6,000,001 to 15,000,000 Riels 5% From 15,000,001 to 102,000,000 Riels 10% From 102,000,001 to 150,000,000 Riels 15% Greater than 150,000,000 Riels 20%
- For an enterprise having principal activity in the insurance or reinsurance of life, property, or other risks, the tax on profit shall be determined as follows:
- 5% of the gross premiums received in the tax year for the insurance or reinsurance of risk in the Kingdom of Cambodia,
- according to the rates specified in paragraph 1, 2, 3, 4 and 5 above for other activities that are not insurance of reinsurance.
Prepayment of Profit Tax
The self-assessment regime taxpayers including qualified investment project under the profit tax rate of 9% must file and pay, on a monthly basis, the prepayment of profit tax at the rate of 1% of the turnover (inclusive of all taxes except for VAT) realized in the previous month by the 15th of the following month. The turnover of the qualified investment project within the tax exemption period shall be exempted from this prepayment. The prepayment is deductible against the tax on profit at the annual liquidation of the tax.
Additional Profit Tax on Dividend Distributions
At the time of making dividend distributions, the self-assessment regime taxpayers shall pay the additional profit tax on dividend distributions as follows:
- An additional profit tax shall be paid in the amount of 20/100 upon
- distribution of retained earnings or annual profit after tax, if the taxpayer is distributing retained earnings or profits that were subject to a tax rate of 0%; and
- any other distribution, except for those mentioned in paragraph 2 and paragraph 3 bellow as well as for any repayment of capital.
- An additional profit tax shall be paid in the amount of 11/91 upon distribution of retained earnings or annual profit after tax, if the taxpayer is distributing retained earnings or profits that were subject to a tax rate of 9%.
- Additional profit tax shall not be paid on the distribution of retained earnings or annual profit after tax, if the taxpayer is distributing retained earnings or annual profit that were subject to the normal rate of 20%, or the rate of 30%.
Withholding Tax on Income Realized by a Resident Taxpayer
Any resident taxpayer carrying on business and who makes any payment in cash or in kind to a resident taxpayer shall withhold, and pay as tax, an amount according to the below mentioned rates which are applied to the amount paid before withholding the tax:
- The rate of 15 percent on:
- income received by a physical person from the performance of services including management, consulting, and similar services;
- royalties for intangibles and interests in minerals, and interest paid by a resident taxpayer carrying on business other than domestic banks and saving institutions to a resident taxpayer.
- The rate of 10 percent on the income from the rental of movable and immovable property.
- The rate of 6 percent on interest paid by a domestic bank or savings institution to a resident taxpayer having a fixed term deposit account.
- The rate of 4 percent on interest paid by a domestic bank or saving institution to a resident taxpayer having a non-fixed term saving account.
The withholding tax shall not apply to interest paid to a domestic bank or savings institution and to the payment of tax exempt income.
Withholding Tax on Income Realized by a Non-Resident Taxpayer
Any resident taxpayer carrying on business and who makes any of the following payments to a non-resident taxpayer shall withhold, and pay as tax, an amount equal to 14 percent of the amount paid.
- royalties, rent, and other income connected with the use of property;
- compensation for management or technical services;