On March 24, 2020, Cambodia’s Ministry of Economy and Finance issued Prakas No. 319 MoEF.Br.K on Tax Measures to Mitigate the Effect of Challenges on Textile and Garment Enterprises.
This prakas provides income tax exemptions to factories and enterprises in the textile, garment, footwear, bag, handbag, and hat sectors that are affected by the partial suspension of the European Union’s Everything but Arms (EBA) preferential tariff scheme.
Companies will receive an income tax exemption for the 2020 tax year based on how the partial suspension of EBA has affected their business. The formula for determining the level of the effect is set out below:
In order to qualify for the above income tax exemptions, companies must submit documentary evidence to quantify the effect of the partial EBA suspension to the General Department of Taxation when submitting their annual income tax returns.
For more details on this tax relief measure, or on any aspect of conducting business in Cambodia, to Tilleke & Gibbins at [email protected].