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May 5, 2020

Cambodia Broadens Tax Exemptions for Aviation and Tourism Sectors

On April 9, 2020, the Cambodian General Department of Taxation (GDT) issued an official notification to clarify and widen the scope of the tax relief measures granted by the Ministry of Economy and Finance earlier this year in response to the COVID-19 pandemic.

The notification widens the scope of tax relief measures for the tourism industry and provides new tax relief measures to the aviation industry, as both these sectors are suffering greatly due to the global pandemic and the major decline in tourism. The GDT thus instructs all tax institutions to implement the following sector-specific relief measures:

Aviation Sector

For the period from March to May 2020, airlines established in Cambodia are exempt from the obligation to pay minimum tax and prepayment tax on income.

Tourism Sector

The notification widens the scope of previously announced tax relief measures for the tourism industry.

A prior decision of the Ministry of Economy and Finance provided an exemption from all types of monthly tax from February to May 2020 for hotels and guesthouses in Siem Reap Province. Monthly tax and E-VAT filings are still required during the exemption period, and the tax-exempt entities are still required to file their annual income tax return for 2019 before the end of March 2020. However, entities that have to pay any additional profit taxes may do so in monthly installments, between now and November 2020.

The April 9 notification reiterates these relief measures, but widens the geographical scope to the following tourism focused areas:

  • Phnom Penh
  • Sihanoukville
  • Kep
  • Kampot
  • Bavet
  • Poipet

For the new areas, the relief measures are applicable from March to May, 2020. The period for Siem Reap remains February to May, 2020.

The notification further clarifies that eligible entities include restaurants and travel agents as well as hotels and guesthouses, and eligibility is again limited to entities registered with the GDT.

For more details on this notification, or on any aspect of tax law in Cambodia, please contact Tilleke & Gibbins at [email protected].

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