The General Department of Taxation (GDT) has reiterated a call for owners of e-commerce and other online entities conducting business in Cambodia to properly register, saying it will start to charge a value-added tax (VAT) on digital goods and services on January 1.

Addressing a seminar on the new VAT rules for e-commerce on December 22, GDT director-general Kong Vibol noted that e-commerce has been booming during Covid, with the volume of goods traded online on the rise.

“In the past, these e-commerce transactions haven’t always properly complied with tax obligations. Even some cross-border electronic transactions on platforms such as Netflix, Facebook, Google and Amazon have yet to comply with GDT law, as we’re still seeing some bottlenecks,” he said.

However, he noted that some of these companies have recently started discussions with the GDT on e-commerce transactions in Cambodia, purportedly to avoid damaging their reputation on international stock exchanges.

“Currently, there are many online businesses in Cambodia, but they have not yet registered properly, so to avoid penalties, please hurry and pay taxes on time,” Vibol said.

King Ratana, director-general of national and international courier service company KR Express, said the company plans to consult the GDT on a regular basis next year, and is currently preparing the required documents to properly manage and satisfy tax obligations.

However, he also requested the GDT provide online businesses with more information, especially on the procedures and benefits of proper registration, to encourage them to register, and avoid negligence due to ignorance, or other issues down the road.

Cambodian tech and digital businesses achieved $470 million in revenue for 2019, the Asian Development Bank (ADB) reported late in May.

Broken down by sectors, e-commerce accounted for 27.6 per cent, e-services 7.8 per cent, digital media 10.2 per cent, advertising technology 12.7 per cent, transportation 3.8 per cent and online travel 37.9 per cent, the Metro Manila-based multilateral lender said.