Corporate Taxation in Cambodia
Understanding the tax regime and taxpayer categories for businesses in Cambodia
Understanding the Cambodian Corporate Tax Regime
Cambodia applies a single and unified tax system, known as the Real Regime of Taxation. This system applies to all individuals and legal entities conducting business activities in the country also referred to as taxpayers.
Taxpayers in Cambodia are classified into three categories:
- Small taxpayers
- Medium taxpayers
- Large taxpayers
All taxpayers must comply with the Tax Law of Cambodia, register with the General Department of Taxation (GDT), and obtain an annual business license called the patent tax certificate. This certificate must be renewed every year between January 1st and March 31st.
Why Taxpayer Category Matters
Your taxpayer category determines several key tax obligations, including:
- The annual patent tax amount
- Eligibility and cost of certain licenses
- Monthly tax declaration requirements
- VAT obligations
- Requirements for issuing tax-compliant invoices
Tax Regime & Legal Structure
Your taxpayer category depends primarily on the legal structure of your business the one chosen at the time of company registration in Cambodia. Choosing the right structure is crucial, as it directly impacts your taxation.
Taxpayer Categories in Cambodia
Since January 2021, the classification criteria have been updated under Prakas 009 (replacing Prakas 025). Under the Real Regime, taxpayers are divided into three distinct groups based on either:
-
Annual turnover, or
-
The value of their assets
Below is an overview of the classification based on annual turnover
(Sole proprietorships or partnerships)
- Agriculture, commerce, services:
Annual turnover from KHR 250 million (USD 61,500) to KHR 1 billion (USD 245,000)
- Industrial sector:
Annual turnover from KHR 250 million (USD 61,500) to KHR 1.6 billion (USD 393,000)
- Expected turnover exceeding KHR 60 million (USD 14,700) over any three consecutive months
- Participation in public tenders, pricing consultations, or pricing surveys
(for goods or service procurement)
- Agriculture:
Annual turnover from KHR 1 billion (USD 245,000) to KHR 4 billion (USD 983,000)
- Commerce and services:
Annual turnover from KHR 1 billion (USD 245,000) to KHR 6 billion (USD 1.4 million)
- Industrial sector:
Annual turnover from KHR 1.6 billion (USD 393,000) to KHR 8 billion (USD 1.9 million)
Companies operating as representative offices or legal entities
… Full details available in the BCC Members’ Private Area.
- Agriculture:
Annual turnover above KHR 4 billion (USD 983,000)
- Commerce and services:
Annual turnover above KHR 6 billion (USD 1.4 million)
- Companies registered as multinational entities or foreign branches
- Companies registered as Qualified Investment Projects (QIP)
… Additional details available in the BCC Members’ Private Area.
Additional Criteria
Other factors, such as the nature of the activity or business location, may also influence the taxpayer category. In some cases, classification is subject to the discretion of the local tax administration.
Business Center Cambodia Note
Choosing the right company structure and ensuring proper registration with Cambodian ministries is essential, as these decisions directly impact the tax obligations of your business.
Business Center Cambodia has in-depth knowledge and long-standing experience in Cambodian taxation and company registration. We help you determine the most appropriate strategy when setting up your company.
Tax Obligations for Cambodian Taxpayers
All three taxpayer categories must comply with the following tax obligations:
- Monthly and annual income tax declarations
- Monthly tax payments, including:
Value Added Tax (VAT)
Withholding tax (salary tax, rental tax, etc.)
Social benefit taxes
- Monthly prepayment of 1% Tax on Profit
- Annual Tax on Profit payment
- Compliance with tax audits
- Proper bookkeeping and mandatory documentation
Exclusive Information Reserved for BCC Members
To continue reading and access the full tax guidance, become a member:
- VAT declaration in Cambodia
- Corporate tax filing
- Annual patent tax
- Tax exemptions
- Corporate taxation for non-individual businesses
- Invoicing rules and compliance