On 23 December 2020, the Royal Government of Cambodia (“RGC”) issued a press release and rolled out ‘Round 7’ of measures aimed at mitigating the impacts of COVID-19 on businesses and workers in Cambodia.
The RGC in their press release noted the positive update with respect to the development of a COVID-19 vaccine and the fact that Cambodia has to date managed to effectively control COVID-19. The RGC made the point that without 100% clarity about the safety, quality and effectiveness of the vaccine and the issues faced by countries with respect to the transportation and storage of the vaccine that there is still a great deal of risk around potential future COVID-19 outbreaks meaning that Cambodia cannot return to normalcy immediately.
With that in mind the RGC has extended previous COVID-19 measures which are summarized below:
The RGC will continue to implement measures that provide aid to suspended employees and workers in certain segments of the private sector. This includes those in the garment, textile and footwear (“GTF”) sectors, as well as certain segments of the tourism sector, that are registered with the Department of Labour and Vocational Training (“DLVT”), the Ministry of Commerce (“MOC”), the General Department of Taxation Cambodia (“GDT”) and, where applicable, the Ministry of Tourism (“MOT”).
Those suspended workers, subject to their current status being certified with appropriate documentation, will continue to be eligible to receive government subsidies of USD 40 per month for a further period of three months, until the end of March 2021. An additional USD 30 per month contributed by the factories and enterprises will be available to GTF sector workers (amounting to a total of USD 70 per month for such workers).
Hotel, guest house, restaurant and tourism workers will be eligible to receive USD 40 per month for a further period of three months, until the end of March 2021. In addition to the Government subsidies, enterprises and businesses in the tourism sector may provide financial contributions to their employees on a voluntary basis or subject to their financial capacity.
In addition:
The 4% Stamp Duty that applies on the transfer of immovable property in Cambodia will continue to be exempted on the transfer of residential property that is valued equal to or at less than USD70,000 for the period from January 2021 to December 2021 provided the following criteria is met:
For Cambodian financial institutions (banks and MFI’s) that obtain financing whether from domestic or offshore lenders, the applicable withholding tax rate (“WHT”) on interest payments will continue to be revised.
For new loans, the WHT rate in respect of loans from both domestic and offshores sources (including those from both Double Tax Agreement (“DTA”) countries and non-DTA countries) will be reduced to 5% for 2021 and 10% for 2022 respectively. The standard WHT rates will apply from 2023 onwards.
For existing loans held by Cambodian financial institutions, the WHT rate will continue to be reduced to 10% for 2020 and 2021.
The program to provide cash benefits to poor and vulnerable families that were hit particularly hard during the COVID-19 pandemic is extended by three more months (January 2021 until the end of March 2021).
All relevant ministries are directed to implement these instructions immediately, efficiently and without delay.
The RGC will continue to monitor the COVID-19 situation along with the economic and financial climate both locally and globally, in order to assess and take action where necessary to ensure the welfare of all priority sectors of the Cambodia economy. This is in keeping with the RGC’s aims to stabilize and revitalize the national economy and restore economic growth as the effects of the COVID-19 pandemic gradually begin to subside.
The information provided here 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.
Contacts
Partner, Cambodia Deputy Managing Director & Head of Cambodia Tax Practice
Partner, Cambodia Deputy Managing Director & Head of Cambodia Corporate & Commercial Practice