Cambodia: E-commerce tax comes into force from April

The Cambodian government started implementing the collection of value-added tax (VAT) for e-commerce transactions in Cambodia from the beginning of April 2022.

Eng Ratana, Director of the Large Taxpayer Department of the General Department of Taxation, said in a recent workshop on e-commerce tax that the GDT started the implementation of VAT on e-commerce from April 1, 2022.

The implementation is in response to the revenue collection strategy 2019-2023. The government has a policy of not increasing tax rates or creating new taxes by strengthening laws and regulations on existing taxes and strengthening the management of tax revenue collection.

The GDT has been preparing to develop the E-Filing tax system to make it easier for taxpayers to implement transparency and efficiency in accordance with tax laws and regulations to collect tax revenue as planned by the law, he said.

Registered taxpayers who receive digital goods/services or e-commerce activities from a non-resident, whether the non-resident has registered for VAT or not, will need to pay 10 percent VAT to the GDT on behalf of the non-resident under a VAT reverse charge mechanism.

Cambodia Digital Tech Association president Chhin Ken lauded the move, saying that the government will increase tax income from e-commerce.

“While the country’s economy is turning to digital, I think it is a good move for implementing the government’s policy,” Ken said.
Ken, however, said that the implementation of VAT on e-commerce would increase the price of services and goods traded via e-commerce by up to 10 percent, which is borne by the customers.

The implementation of VAT on e-commerce would be practised for the registered businesses, which would lead to unfair business competition between registered and non-registered businesses, Ken said.
Earlier, the Ministry of Economy and Finance had decided to extend the deadline for the implementation of the rules and procedures for the implementation of VAT on e-commerce transactions aimed to allow sufficient time for taxpayers to understand more clearly and be ready to participate in the implementation smoothly.