Logo of Phnom Penh Post newspaper Phnom Penh Post - Employees’ seniority pay to be tax-free: GDT

Employees’ seniority pay to be tax-free: GDT

Content image - Phnom Penh Post
The General Department of Taxation. Post Staff

Employees’ seniority pay to be tax-free: GDT

The General Department of Taxation (GDT) on Thursday said back payments of seniority indemnity for Cambodian employees are tax exempt, while employers can also deduct the payments from their income taxes.

The GDT’s instruction circular, signed by Cambodian Minister of Economy and Finance Aun Pornmoniroth on April 11 and released on Thursday, also says that services in relation to recruiting, training, transporting and managing workers overseas by private agencies are exempt from value-added tax.

Ros Sokhom, managing director of auditing firm Rosoco Limited, on Thursday said the ministry’s circular clarifies conditions for employees who are set to receive the payment, as well as employers who will be paying, establishing that they are free from tax obligations.

“The benefit is going to be for Cambodian employees as they will receive the full amount of seniority payment without being required to pay tax,” he said.

Sokhom added that allowing the back payments of seniority indemnity to be deducted from employers’ current income taxes is a positive move as it reduces the company’s burden.

“The decision makes employees receive full benefits while it also reduces some of the burden for their employers,” he said.

Sokhom continued that it is too early to estimate how much revenue the government is set to lose from the tax exemption, but said it should not be excessive.

The Ministry of Labour and Vocational Training in September issued the prakas on seniority payment indemnity, instructing all employers to provide their employees with the security payments starting this year.

Seniority payments will be made twice per year, with the employer providing employees with a payment equal to 15 days per year of their wages, along with other benefits.

MOST VIEWED

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Rise in planned flights lifts travel hopes

    Six airlines have applied to resume flights in December, while two others have put in for additional flights and routes, according to State Secretariat of Civil Aviation (SSCA) head Mao Havannall on November 29. These account for 43 new weekly domestic and international flights in December, up 16

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Hun Sen: Manet to be candidate for prime minister

    Prime Minister Hun Sen has reaffirmed that his oldest son Hun Manet will be his successor as Prime Minister if he is elected. Speaking during the inauguration of a new sewage treatment facility in Preah Sihanouk province on December 2, Hun Sen said Manet will be

  • Is Cambodia’s travel sector in for another cheerless holiday season?

    The travel and tourism sector was heaving back to life as borders started to reopen, promising a festive vibe for the holidays and New Year. But Omicron and other Covid-related issues are threatening to close the year on a bleak note ‘Seems [like] Covid-19 won’