Cambodia: Government adds VAT on e-commerce transactions

• Apr 13, 2021

E-commerce transactions, for both digital products and services, are now subject to value-added-taxes (VAT) in Cambodia, as the number of online transactions has seen a rapid increase.

In a sub-decree signed by Prime Minister Hun Sen on April 8, e-commerce transactions provided by non-resident taxpayers who do not have permanent offices in Cambodia will be obliged to pay VAT in a move to ensure the effectiveness of tax collection in Cambodia.

E-commerce activities within Cambodia must comply with existing VAT regulations.

The sub-decree states that tax registration for non-resident taxpayers shall be made according to the classification of taxpayers under the self-declared regime.

Failing to fulfill tax obligation, both resident and non-resident taxpayers shall be punished in accordance with the taxation law.

The government has been mulling over imposing a digital service tax on international tech companies, according to the Ministry of Posts and Telecommunications.

The ministry said it aims to collect tax on such services provided by firms that generate revenue from Cambodians but are not registered in the Kingdom.  These include companies such as Netflix, Amazon, Alibaba, Facebook and Google.

The Ministry and the General Department of Taxation at the Ministry of Economy and Finance have worked on this initiative.

The number of both fixed and mobile internet subscribers in Cambodia increased remarkably last year thanks to the high usage of the internet during the COVID-19 pandemic.

More than 16 million people, including mobile and fixed internet users, were registered as internet subscribers last year, a year-on-year increase of 40 percent.

That number is equivalent to the nation’s population of 16 million.

Source: https://www.khmertimeskh.com/50838521/government-adds-vat-on-e-commerce-transactions/