Issued: 02 December 2025
The General Department of Taxation (“GDT”) issued Instruction No. 37705 on 2 December 2025 to provide comprehensive operational guidance on the accrual accounting basis for tax purposes in alignment with Cambodia’s International Financial Reporting Standards requirements. The Instruction clarifies how taxpayers must record and declare transactions—both income and expenses—that are incurred and recognized in accounting before actual payment.
Below is the summary of Instruction No. 37705
A. Accrued Expenses
| Description | Details |
|---|---|
| Purchase Voucher Format | Accrued expenses must be supported by a Purchase Voucher containing: Document name/description, number and date, account and sub‑account codes, debit/credit amounts, description, and preparer/approver name, date, and signature. |
| Recording in Purchase Journal | Must be reported in the Purchase Journal, including voucher number, date, amount, and description. |
| WHT and VAT input Implications | For any accrued expenses that are subject to WHT, the taxpayer must report in the monthly WHT returns. No VAT input may be claimed until a valid tax invoice has been received. |
| Upon Receipt of Actual Invoice | • If accrued WHT amount > actual WHT amount per invoice, overpaid WHT may offset with current month’s WHT payable; excess carried forward. • If accrued WHT amount < actual WHT amount per invoice, additional WHT on the shortfall must be declared and paid in the current month. |
B. Accrued Revenue
| Description | Details |
|---|---|
| Sale Voucher Format | Must be supported by a Sale Voucher containing similar information as required for accrued expenses. |
| Recording in Sales Journal | Must be reported in the Sales Journal, including voucher number, date, amount, and description. |
| PTOI and VAT Output | Accrued revenue from main business activities or subsidiary income (turnover) is subject to PTOI. No VAT output is recognized until the taxpayer issues the actual tax invoice. |
| Upon Issuance of Actual Invoice | • If accrued PTOI amount > actual PTOI amount per invoice, overpaid PTOI may offset with current month’s PTOI payable; excess carried forward. • If accrued PTOI amount < actual PTOI amount per invoice, additional PTOI on the shortfall must be declared and paid in the current month. • VAT output is based on the actual invoice amount. |
The GDT has also issued Instruction No. 37706, which provides guidance on how to declare accrued revenue and expense transactions in the E‑Filing system.
If any taxpayer intentionally declares false accrued transactions purposely for reducing tax based, it will result in penalties being imposed by the tax administration in accordance with relevant tax law and regulations in force.
DFDL Commentary
Instruction 37705 provides clearer guidance on accrual accounting for tax purposes and offers improved consistency in treatment across withholding tax, Value Added and related tax filing. DFDL can assist taxpayers with compliance reviews and implementation support.
Tax services required to be undertaken by a licensed tax agent in Cambodia are provided by Mekong Tax Services Co., Ltd, a member of DFDL and licensed as a Cambodian tax agent under license number – TA201701018.
DFDL provides specialized Tax & Transfer Pricing counsel throughout the ASEAN region. Visit our Cambodia team office for more information.
