The General Department of Taxation (GDT) has announced an extension of tax incentives for local filmmakers from 2024 to 2028, aiming to bolster Cambodian cinema and film production.
The decision, confirmed in a recent letter from the GDT to the Ministry of Culture and Fine Arts, included the suspension of a 15 per cent withholding tax on intangible assets, notably for the rights to screen local films.
The GDT also outlined that the suspension of income tax for local film production companies includes the deferred implementation of a 10 per cent tax on artistic performances, such as those presented by the social enterprise Phare Ponleu Selpak in Siem Reap and Battambang.
“Local filmmakers and circuses must complete tax registration, maintain accounting records, submit monthly and annual tax returns and fulfil various tax obligations akin to other business entities. This aligns with the GDT’s objective of enhancing fiscal compliance and fostering a tax culture in Cambodia,” the GDT said.
Pok Borak, director of the ministry’s Department of Film and Cultural Promotion, said on December 5 that the tax relief is beneficial. It eases the burden on producers, especially considering the previous mandate’s suspension of tax obligations from 2017 to 2023.
“Over the past five years, we have seen that this is not only highly motivating for producers but also provides significant financial relief. It affords them the opportunity to enhance resources and quality in film production,” he said.
He noted that during the Covid-19 crisis, local film production faced limitations, particularly in 2021. Although there was a slight increase in production and screening in 2022, levels have not yet returned to normal.
“This year, we observe a significant recovery in both film production and theatrical screenings. It is almost like the period before the pandemic, with approximately 30 domestically produced films being screened in theatres,” Borak said.
Men Chonsun, operations manager at Kongchak Pictures, a local film production, acknowledged that this measure will contribute to alleviating financial burdens on producers. However, he and other filmmakers have additional requests of the government, including funding for producers and coordinating the screening of Cambodian movies.
“The filmmakers’ objective is to provide audiences with relief by presenting high-quality films. Undoubtedly, these tax incentives have been beneficial for us,” he said.
The department explained that the withholding tax suspension for domestic filmmakers responds to requests from both the culture ministry and the Association of Filmmakers of Cambodia (AFC).