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Cambodia starts collecting VAT on e-commerce from today

Thong Sotha​​   On April 1, 2022 - 11:53 am​   In Cambodia Insider  
Cambodia starts collecting VAT on e-commerce from today Cambodia starts collecting VAT on e-commerce from today

The implementation of value added tax (VAT) on e-commerce will start today after a three-month delay.

Speaking to Fresh News, Kong Vibol, Minister accompanying the Prime Minister and Director General of the General Department of Taxation, confirmed on the afternoon of March 31, “Nothing has changed, we have started to apply value-added tax on e-trade. “From April 1 onwards, until now, 16 international companies have registered the Simplified VAT Registration of the General Department of Taxation.”

According to Vibol, the 16 international companies include: 1-Meta Platforms Ireland Limited, 2-Silverlake Structured Services SDN.BHD, 3-Facebook Technologies Ireland Limited, 4-Huawei Services (Hong Kong) Co., Ltd, 5 -Microsoft Regional Sales Pte Ltd., 6-Facebook Payment International Limited, 7-Booking com.BV, 8-Google Asia Pacifice Pte.Ltd, 9-Netflix Pte.Ltd, 10-Xsolla (USA), Inc, 11-ERNST & Young (Asia-Pacific) Services Limited, 12-Zoho Corporation Pte.Ltd, 13- TATA Consultancy Services Limited, 14- Siam Makro Public Company Limited, 15- Mastercard Asia / Pacific Pte Ltd and 16-TikTok Ptd Ltd.

On March 28, 2022, the General Department of Taxation issued a warning to non-resident taxpayers (not headquartered in Cambodia) who supply digital goods or digital services electronically or in any e-commerce activity to pay VAT.

In case the non-resident taxpayer do not register or does not file the tax return and pays the value-added tax to the tax administration in time, the law stipulates the penalties as stated in the law and tax regulations.

The introduction of value added tax (VAT) on e-commerce is not a new tax.

Value Added Tax (VAT) is a tax already levied on products or services of all kinds in the tax law, but in the past e-commerce was not yet legal, but in 2019 the law on trading by the e-commerce system has been approved, so through this law there is a definition of e-commerce activities, to facilitate the VAT that has already been implemented on e-commerce. It is misunderstood that the government creates taxes but that is not the case as this is an existing tax.

This sub-decree on the implementation of value-added tax on e-commerce covers foreign companies that do not have a permanent establishment (headquarters) in Cambodia.

For example, a company that does not have its company location in Cambodia but that company has its customers in Cambodia, the new sub-decree covers this type of company. When a local customer buys a service or digital production from a company that is not based in Cambodia, the company is subject to a 10% VAT. Fresh News/Khmer Times