With international fuel prices continuing to rise, the Cambodian government has assumed the burden of Value Added Tax (VAT) on diesel and liquefied petroleum gas (LPG).
According to an April 3 directive issued by the Ministry of Economy and Finance, made public today, April 6, the move is intended to respond to rising global prices of diesel and LPG and to help ease the cost of living for citizens.
Under the “State Bearing of VAT on the Supply of Diesel and LPG”, the government will cover the 10% VAT on the supply of diesel and LPG.
The directive outlines how that importers and domestic distributors must comply.
They must issue tax invoices to customers under the self-declaration tax regime, but must not charge VAT. Instead, the invoice must replace “VAT rate 10%” with “VAT borne by the state”.
They must issue regular invoices to end consumers (who are not under the self-declaration regime), with sale prices excluding VAT, and in the monthly online tax filing system (e-Filing), under the “Purchase and Sales Journal” function, they must select the supply category “VAT borne by the state.”
VAT at 4% and/or 10% paid on imports or domestic purchases of diesel and LPG is allowed as input tax credit based on actual amounts paid, provided there are customs declarations, tax payment receipts, tax invoices and valid payment documents. Input tax credits for other goods or services must follow standard VAT regulations.
The directive will remain in effect until further notice.