CAMBODIA: New VAT Obligations for Non-Resident Businesses

Non-resident businesses (with no physical establishment in the country) that supply goods or services electronically to consumers in Cambodia are now obliged to register for VAT with the tax authority if their actual/estimated revenue exceeds the designated thresholds for self-assessed taxpayers. The requirement was recently announced by the Ministry of Economy and Finance, with full details available in Sub-decree 65. 

In term of the sales thresholds for tax registration, these were detailed in Prakas 009, as issued by the government in January this year. This sets a minimum annual turnover of KHR250 million (US$62,214) for small taxpayers; a minimum annual turnover of KHR1 billion for medium taxpayers and a minimum yearly turnover of more than KHR4 billion for large taxpayers. 

In the case of business-to-consumer transactions, non-resident entities supplying digital products or services to users in Cambodia need to file monthly VAT returns and pay 10% VAT on the transaction value no later than the 20^th day of the month following the month in which the transaction was concluded. For business-to-business transactions, however, a reverse charge mechanism is applicable, with the Cambodia-based purchasers having to first account for the VAT on behalf of the non-resident entities, while being eligible for a corresponding VAT input credit.