Via Instruction 19116 dated 20 June 2025 Cambodia’s General Department of Taxation (“GDT”) has released detailed guidance on the tax treatment of board members and company directors, offering clarity on how compensation—whether domestic or offshore—is categorized as salary and subject Tax on Salary (“ToS“) or as services and subject to Withholding Tax (“WHT“). This moves underscores Cambodia’s commitment to applying substance-over-form principles, particularly in the context of cross-border personnel arrangements.
Key Legal References:
- Article 42, Law on Taxation (Promulgated May 2023)
- Prakas No. 575 MEF.P.GDT (Issued September 2024), Articles 4 and 7
- Articles 25 and 26, Law on Taxation – governing WHT and intercompany allocations
- Instruction 19116 Tax obligations for Board Members and Directors dated 20 June 2025
Click “Download” to read DFDL Cambodia’s Summary of Core Guidance, which outlines:
- Employment status determines tax treatment
- The location of payment is irrelevant
- Intercompany cost allocations may trigger withholding tax (WHT)
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.
