Logo of Phnom Penh Post newspaper Phnom Penh Post - Government prakas fixes unclear law on taxes

Government prakas fixes unclear law on taxes

Government prakas fixes unclear law on taxes

The Ministry of Economy and Finance (MEF) published a prakas yesterday that clearly defines the government’s laws for nontaxable supplies that receive a VAT exemption on primary financial services – a move that industry insiders claim gives more clarity to businesses.

Prior to the prakas, primary financial services were loosely defined and difficult for businesses to enact when meeting their tax obligations. Now, five financial activities have been identified that fall into the 10 percent VAT exemption territory.

These five services, listed into subsectors, include deposit, loan and credit activity; initial public offering (IPO) and trading related to the Cambodian Securities Exchange (CSX); money exchange; pawn brokers; and gold trading, providing it is not used for jewellery production.

Clint O’Connell, head of tax practice for foreign investment advisory and tax firm DFDL Cambodia, said the announcement provides assurances for registered taxpayers and businesses looking to invest in Cambodia that they will not be required to charge the 10 percent VAT on these activities.

“This will benefit those businesses who may have been unsure as to whether what they were doing fell under one of the categories of a non-taxable supply,” he said.

In Channy, president of Acleda Bank, said that while VAT exemption had been applied for some time by MEF, it was not until now that the government explicitly said in writing what primary financial services were.

While he said the announcement does not change current operations by financial institutions, it makes meeting the tax obligation “clearer and easier to achieve”.

MOST VIEWED

  • US names new ambassador to Cambodia

    US President Donald Trump on Friday appointed W Patrick Murphy as the new US Ambassador to Cambodia, replacing incumbent William A Heidt. A press release posted on the White House’s website said nominee W Patrick Murphy is currently acting principal deputy assistant secretary at

  • Kingdom is at a crossroads between East, West after poll

    It was dubbed a success by caretaker prime minister Hun Sen after the electoral victory of his Cambodian People’s Party (CPP), which is poised to take all seats in the National Assembly. But the July 29 national election has not been positively looked at by

  • Chinese influence to sweep Kingdom?

    Growing Cambodia-China ties have seen the latter’s influence sweep across the Kingdom through increased investments and tourism. The Asian giant has become the leading source of foreign funds in Cambodia, fuelling the construction sector with huge casino and hotel projects. Much of the growth

  • Western poll flak is ‘pressure to take the Kingdom hostage’

    After last month’s national elections brought praise for the orderly manner they were run and managed, the ruling Cambodian People’s Party (CPP) spokesman Sok Eysan dismissed criticism from the West as a “violation of the Kingdom’s independence”. He said the attitude of