Additional Tax Relief in the Fourth Round of Stimulus Measures to Respond to the Ongoing COVID-19 PandemicMay 29, 2020
Due to the ongoing COVID-19 situation, on 26 May 2020, the Royal Government of Cambodia (“RGC”) issued a press release on the fourth round of stimulus measures in response to the COVID-19 pandemic, which are aimed at rebuilding and promoting economic growth after the COVID-19 crisis.
The newly announced package extends tax relief previously set out, and includes new tax relief for banks and financial institutions.
Extension of previous tax relief measures for another two months
The previous tax relief measures that covered the following sectors for the period March to May 2020 have been extended as follows:
All companies in the tourism sector (i.e. hotels, guesthouses, restaurants, and travel agents) will continue to be exempt from the payment of all monthly taxes for another two months (i.e. for June and July 2020). This applies to businesses that are registered with the General Department of Taxation (“GDT”) and have business activities in Phnom Penh, Siem Reap, Preah Sihanouk, Kep, Kampot, Bavet, or Poi Pet.
All airline companies established in Cambodia are granted exemption from Minimum Tax for another two months, i.e. for June and July 2020.
Reduced Withholding Tax rate on loans sourced from both local and overseas lenders
The Withholding Tax (“WHT”) rate on interest of loans borrowed by banks and microfinance institutions from either local or overseas lenders, is reduced from 15% (for local lenders) or 14% (for overseas lenders) to:
- 5% for all countries, regardless of whether or not there is a Double Taxation Agreement with Cambodia, for the year 2020.
- 10% for all countries, regardless of whether or not there is a Double Taxation Agreement with Cambodia, for the year 2021.
The WHT rate on interest of existing loans borrowed by banks and microfinance institutions from either local or overseas lenders, is reduced from 15% (for local lenders) or 14% (for overseas lenders) to 10% for the year 2020.
We understand that the RGC is closely observing the socio-economic impacts of the current global pandemic, and will set forth further measures to provide appropriate support to businesses as needed. We will keep you posted when we receive further updates from the RGC.
If you have any questions on this alert, please contact the undersigned or your usual VDB Loi adviser.
- Notification No. 5735 GDT dated 16 February 2023 issued by the General Department of Taxation on “Annual Tax on Income Filing for 2022”
- February 27, 2023
- Notification No. 5367 GDT dated 14 February 2023 issued by the General Department of Taxation on “2022 Market Interest Rates for Loans”
- February 20, 2023
- Instruction No. 26118 GDT dated 28 October 2022 issued by the General Department of Taxation on “The Use of Exchange Rates for Self-Assessment Taxpayers”
- November 30, 2022
- Instruction No. 27185 GDT dated 14 November 2022 issued by the General Department of Taxation on “The hanging or displaying of the tax registration documents at the business premises”
- November 30, 2022
- Pension fund
- October 24, 2022