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.

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Speaking to Fresh News, Kong Vibol, Minister Accompanying the Prime Minister and Director General of the General Directorate of Taxation, confirmed on the afternoon of March 31: “Nothing has changed, we have started applying the value added tax on e-commerce. “From April 1, 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 (without a registered office in Cambodia) who supply digital goods or services electronically or in any e-commerce activity to pay VAT.

In the event that the non-resident taxpayer does not register or file the tax return and pay the value added tax to the tax authority on time, the law provides for the penalties provided for by law and regulations. tax.

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 goods or services of all kinds in tax law, but in the past e-commerce was not yet legal, but in 2019 the law on exchanges through 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 it is not because it 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 (head office) in Cambodia.

For example, a company that does not have its headquarters in Cambodia but has its customers in Cambodia, the new sub-decree covers this type of company. When a local customer purchases a digital service or production from a business that is not based in Cambodia, the business is subject to 10% VAT. fresh news