The General Department of Taxation (GDT) in Cambodia is implementing tax incentives for micro, small, and medium enterprises (MSMEs) operating in the informal economy, aligned with the National Strategy for Informal Economic Development 2023-2028. These incentives are designed to promote voluntary tax registration and compliance with government policies among MSMEs.

Under this initiative, MSMEs operating in priority sectors such as wholesale, retail, accommodation, food services, handicrafts, and agricultural cooperatives can benefit from tax exemptions and other incentives as below:

• For voluntary tax registration in 2023-2028, micro-enterprises are entitled to exemptions on tax registration fees, information update fees and registration card printing fees.
• For voluntary tax registration in 2023-2028, small enterprises are entitled to the following exemptions:
  • Penalties and tax debt, including tax payable, additional taxes, interests, and fines directly related to the enterprise’s business, for non-compliance prior to voluntary tax registration.
  • Tax registration fees, information update fees, and registration card printing fees.
  • Patent tax upon tax registration.
  • Patent tax for two years after successful tax registration in 2024 or 2025.
  • Prepayment of tax on income, tax on income, and minimum tax for two years after tax registration, counting from the year in which tax registration is approved and the subsequent tax year.
• For voluntary tax registration in 2024-2025, medium enterprises are entitled to the following exemptions:
  • Penalties and tax debt, including tax payable, additional taxes, interest, and fines directly related to the enterprise’s business for non-compliance prior to voluntary tax registration.
  • Patent tax upon tax registration.
  • Patent tax for 2 years after successful tax registration in 2024 or 2025.

Enterprises benefiting from tax incentives must adhere to their tax obligations as below:

• Micro-enterprises must:
  • Report annual turnover using forms provided by the tax administration between January 1 and March 31 of the following year.
  • Update relevant information within 15 days of any changes in address, business objectives, ownership transfer, business closure, contact details.
• Small and medium enterprises are required to:
  • Inform the tax administration within 15 days of changes in address, company structure, name, business objectives, ownership transfer, managerial composition, business closure, bank account details, and contact information.
  • Maintain accounting records and submit tax returns as mandated by the tax administration, even if exempt from certain tax payments.
  • Submit monthly and annual tax returns in accordance with prevailing tax laws and regulations.

To avail these incentives, MSMEs can register online via the link: https://www.registrationservices.gov.kh or in person with the General Department of Taxation. Moreover, it’s emphasized that unilateral registration by the tax administration is not considered voluntary.

For additional information, please contact our expert VANN Sinat.

The content shared here is for informational purposes only and should not be interpreted as a legal advice. Legal matters can be complex and may vary based on individual circumstances. For personalized guidance on specific legal issues, we recommend consulting with our qualified legal professionals.