As per Notification No. 039 issued by the Ministry of Economy and Finance (MEF) on 21 July 2016, a working group consisting of representatives from both the General Department of Taxation (GDT) and the Phnom Penh Municipality will begin to collect data from all enterprises in Phnom Penh from August 2016 onwards.
Representatives of the working group will physically visit all enterprises in Phnom Penh for the purpose of:
- Gathering the enterprise’s statistics;
- Requesting for information of the enterprise relating to its identity and activities; and
- Obtaining any necessary information to support the improvement of:
- The investment climate in Cambodia;
- The preparation of tax incentive policies;
- The dissemination of tax regulations; and
- The provision of registration services and other tax services to the owners of enterprises and businesses at all levels in an increasingly more efficient manner.
For the sake of convenience, the MEF has requested all enterprises owners to prepare a copy of necessary documents for the working group as below:
For enterprises that are already registered with the GDT:
- Certificate of tax patent (most recent year) and VAT certificate;
- Receipt of yearly tax payment (most recent year) and receipt of monthly tax payment (most recent month); and
- Water bill and electricity bill (most recent month).
For enterprises that are not yet registered with the GDT:
- Identification card or passport or family book or residence book of the enterprise owner;
- Business permission certificate issued by the competent authorities (if available);
- Other licenses (if available);
- Immovable property ownership certificate or leasing agreement of the location and receipt of tax payment on immovable property; and
- Water bill and electricity bill (latest month).
It would appear that the primary motivation behind this data collection exercise is for the GDT to ascertain how many enterprises in Phnom Penh have complied with the new tax registration requirements which, in principle, require all businesses to register with the GDT. Now that the estimated regime of taxation has been abolished, since 1 January 2016, most enterprises should be registered as either small, medium or large real regime taxpayers. Even those enterprises that do not meet the criteria to register as a small real regime taxpayer are still required to register with the GDT as per Prakas on Tax Registration No. 496 that was issued earlier this year.
We recommend to our readers that they ensure they have the documents, as listed above, on hand when the working group visits their premises. We also suggest that an individual who has sufficient knowledge and understanding of the affairs of the business be designated to speak to the working group during their visit.
Whilst tax registration appears to be the primary driver, there can be little doubt that the GDT officials may also use this opportunity to check the enterprises compliance with respect to other taxes such as Property Tax, Tax on Salary and Patent Tax, among others.
If you have any queries relating to this alert, please get in touch with your usual DFDL contact or Clint O’Connell.
Cambodia Head of Tax
*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.