Updated implementation rules for Value Added Tax liabilities for non-residents of digital services to Cambodian consumers
The Cambodian General Department of Taxation has updated its guidance for non-resident sellers, marketplaces and providers of e-commerce goods and digital services. These traders have been brought into the VAT net in April 2022 with a simplified VAT registration and reporting regime.
Key additions to the existing rules (Implementation of Value Added Tax on E-Commerce Transactions (Instruction 2520)) are:
- Suppliers to resident subsidiaries or group Companys are now exempted from the VAT obligations.
- Relexation on the bank information disclosure rules
April 2022 introduction of VAT on digital services
The Cambodian General Department of Taxation is to compel non-resident providers of goods and electronic / digital services to its consumers. The implementation date is 31 March 2022; registrations under the simplified regime should be completed by 1 April 2022. This is the second delay on the planned inclusion of non-residents in the tax net.
This applies only to sales to consumers, B2C, and not B2B imported digital services which may rely on the ‘reverse charge’ and the customer report the VAT through their VAT return. The Cambodian customer must make a VAT withholding of 10%, and pay this directly to the tax authorities as a split payment.
You can follow VAT Calc’s global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.
What digital services are liable to Cambodia VAT
Cambodia defines digital services, ‘electronic commerce’ as property, goods, intangible goods purchased and provided online. This includes:
- The supply of software and other related services
- Online shopping or auctions
- Website hosting
- Data retrieval
- Consumption of digital products and/or contents via download, real-time streaming, subscription, or other means
Digital services VAT compliance
If over the VAT registration threshold of KHR 250millon (approx. €57,000 or $62,000) per annum VAT filings must be submitted on a monthly basis by the 20th of the following month with the General Department of Taxation.
This only applies only to sales to end consumers; businesses customers may report the VAT on behalf of their foreign provider via the reverse charge. This means that if a non-resident has only B2B sales, it does not need to VAT register. It is still unclear on whether the VAT invoicing requirements (e.g., the requirement to use Khmer language, and Khmer Riels, among others) under the current tax regulations would be strictly imposed on the supply of digital goods, digital services, or on all E-commerce transactions.
Asia Pacific VAT on digital services
|Comments (click for details)||Rate||Date||Threshold||Comments|
|Australia||10%||Jul 2017||AUD $75,000|
|Armenia||20%||Jan 2022||AMD 115million|
|Bangladesh||5% - 15%||Jul 2019||–||B2B and B2C|
|Bhutan||7%||Jul 2021||Nu 5million|
|Cambodia||10%||Mar 2022||KHR 250m|
|China||6%-13%||N/a||Nil||Withholding VAT; B2B and B2C|
|Indonesia||11%||Aug 2020||IDR600m or 12k customers|
|Japan||10%||Oct 2015||JPY 10 million|
|Laos||7%||Feb 2022||LAK 400m|
|Nepal||13%||Jul 2022||Rupees 2m||Also 2% DST|
|New Zealand||15%||Oct 2016||NZD 60,000|
|Pakistan||2%||Sep 2021||Nil||Marketplace Withholding VAT|
|Philippines||12%||Jul 2023 ?||P 3million|
|Singapore||7%||Jan 2020||S$ 100,000|
|South Korea||10%||Jul 2015||Nil|
|Taiwan||5%||May 2017||NTD 480,000|
|Thailand||7%||Sep 2021||1.8m Baht|