TAXATION
TAX INCENTIVES FOR EDUCATIONAL ESTABLISHMENTS, Prakas No. 904 on Tax Incentives for Educational Establishments, dated 08 August 2016, Ministry of Economy and Finance.
The purpose of this Prakas is to provide tax incentives for the education sector to support human resource development with high qualifications and to reduce the expenses of parents and guardians of students.
“Educational establishments” in the Prakas refers to public and private educational establishments which provide pure educational services from kindergarten to higher education, as well as technical and vocational training establishments.
The Prakas impacts:
- Minimum tax, profit tax and prepaid profit tax
- Scholarships to student
- Withholding tax
- Value Added tax
Minimum tax, profit tax and prepaid profit tax
- Suspend the payment of minimum tax of 1% of annual revenue until the end 2018
- Suspend the payment of prepaid profit pax until the end of 2018
- Pay profit tax only if there is profit
Scholarships
The granting of scholarships to students, either free of charge or at a discount, will not be considered as taxable revenue for the calculation of annual profit tax.
Withholding tax
For residents: (1) exempted for management or consultation service or similar services which are directly related to student education, and (2) apply withholding tax for services of construction, engineering, architecture and other services which are indirectly related to student education.
For non-residents: (1) exempted for management and technical services which are directly related to student education, and (2) apply withholding tax on interest, commission, rental fee and other revenue involving the use of property and dividends.
Value added tax
Educational services and the supplies of goods and services for education which also includes food and accommodation of students will be tax exempt. Such tax exempted inputs may not be in the form of loans, but allowed to be recorded as expenses.
Obligations of Educational Establishments
- Tax registration
- Submit tax declaration submission to tax administration office (monthly and yearly)
- Possess appropriate accounting system
- Submit audit report performed by Independent Accounting Commissioner for educational establishments that have annual revenue more than 2,000 million riels.
INTELLECTUAL PROPERTY
REGISTRATION AND PROTECTION OF CERTIFICATION MARK FOR 2016, Prakas № 293 dated 30 August 2016
The purpose of this Prakas No. 293, issued by the Ministry of Commerce (“MOC”), is to protect consumers and producers through enforcement of the certification mark system aimed at informing the public and consumers that the mark owners’ certification marks have fulfilled qualifications or standards. Certification marks may refer to quality of raw material, origin, method of production, clarity/clearness or other characteristics.
In addition, this Prakas provides guidance for registration of local certification marks in Cambodia and also of foreign certification marks, which may be registered with the MOC, and sets out the documentation required of an applicant in order for the MOC to consider their application for registration of a certification mark.
HOUSING DEVELOPMENTS
Management of Housing Development Business, Prakas No. 965/SHV.BrK
The purposes of this Prakas, issued by the Ministry of Economy and Finance, are to ensure the effectiveness of management and control of the residential/housing development business, equity and balance of interests between residential development companies and buyers, preventing financial risk in the real estate sector aimed at guaranteeing financial and macroeconomic stability, assuring sustainability of real estate sector development aimed at promoting economic growth, and contributing to curbing money laundering activity in the housing development sector.
This Prakas governs the implementation of activities relating to the housing development business including mechanisms, rules and procedures of management and control.
Pursuant to this Prakas, any housing development business having size from 04 flats or 03 villas or 04 units of housing/residence are required to obtain a housing development business license from the Ministry of Economy and Finance (“MEF”). Any operation of housing development business without such license will be subject to a transitional fine of 100,000,000 (one hundred million) riels imposed by the MEF.
There are two types of licenses:
- Type 1 License: designed for a developer which is entirely financed by its own capital and/or by loan from banking and financial institutions for developing residence/housing and can sell residence/housing to customers upon the completion of the construction.
- Type 2 License: designed for a developer which is financed by its own capital and/or by loan from banking and financial institutions and/or by financial resources raised in advance from the housing buyer for developing residence as the construction progresses and can proceed for the sale of the residence to users in accordance with the terms and conditions prescribed in this Prakas.
To apply for a housing development business license, developers must satisfy the following conditions:
- Be a legal registered entity in accordance with the law and regulations in force.
- Have a minimum registered capital of 2,000,000,000 (two billion) riels.
- Have a housing development account at any commercial bank, if type 2 license.
- Have a certificate of project capital issued by any banking and financial institutions in Cambodia.
- Have deposited a business guarantee of 2% (two percent) of the total investment capital or by installment, if type 2 license.
- Have a detailed business plan of each period of the project.
- Person who has their name written on the license must be the chairman of the board of directors of the company.
- Be insured for construction site responsibility.
DFDL contact:
Alex Larkin
Senior Consultant
alex.larkin@dfdl.com
*The information provided is for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
