Keynotes from GDT Seminar on SOP and Tax Crime Investigation Workshop

On 23 July 2024, the General Department of Taxation (“GDT”) held a workshop Standard Operating Procedures (“SOP”) for Tax Audit and Tax Crime Investigation. The workshop featured prominent speakers, including H.E. Mr. Kong Vibol, Director General of the GDT, Neak Oknha Kith Meng, President of the Cambodian Chamber of Commerce, and Mr. Edwin Vanderbruggen, Senior Partner at VDB Loi Cambodia.

The event aimed to ensure efficient tax audit procedures, the ethics of the tax auditors, and full compliance of tax crime investigations with the Criminal Procedure Code of Cambodia.

Key discussions and insights

1. SOP of tax audit for tax officers & taxpayers

• To streamline the tax audits performed by the tax administration, the SOP outlines two main types: Desk Audit and Onsite Audit (“OA“). Desk Audit (“DA”) is conducted at the tax administration office and involve reviewing and verifying tax returns. Onsite Audit is divided into Limited Audit (“LA”) and Comprehensive Audit (“CA”), focus on different aspects and timelines of tax assessments.
• To avoid an overlapping tax audit, a joint audit (LA and CA) at once will be conducted since only one OA is allowed every three-years.
• If hard evidence of serious tax evasion exists, the Director General of GDT may appoint any competent tax audit department/unit to conduct tax audit or alternatively, the Tax Crimes Investigation Department to carry out the necessary tax crime investigation procedures.
• Taxpayers may request the GDT to conduct an onsite audit within the three-year period. However, if no risk or irregularities are found, the tax administration will not conduct any tax audit.
• The tax auditors may not request documents that the taxpayers have already provided (i.e., during tax registration, previous tax filings, etc.).

2. Remarks on Comparing Cambodia’s Tax Audits to International and Regional Best Practices (Edwin Vanderbruggen)

• In terms of tax revenue (% of GDP), Cambodia scores higher than most in Asia, even higher than several EU countries.
• While the number of tax audits in Cambodia is normal, the lengthy duration of these audits creates a backlog, leaving both taxpayers and the tax authority frustrated by the slow pace of resolution.
• Mr. Edwin encouraged taxpayers to obtain a gold tax compliance certificate. Approximately 300 taxpayers currently hold a gold tax compliance certificate.
• He also suggested some type of express arbitration to eliminate the backlog.

3. SOP manual on tax crime investigation for tax official and tax payers

Taxpayers who obtain a Gold Certificate of Tax Compliance will, generally, not be subjected to audits or crime investigations, but if risk factors occur some type of verification will nevertheless be done.

Additional key highlights

The seminar also highlighted the GDT’s initiatives to resolve the on-going dispute within the shipping and airline industry, alongside efforts to reinforce the tax court system, as mentioned by H.E. Mrs. Bun Neary, Deputy Director General of the GDT.