Under the Law on Taxation (LOT) and Prakas No. 574 MEF.Prk (2024) on Transfer Pricing, this notice applies to businesses that carry out transactions with related parties—such as a parent company, sister company, shareholder, or family-owned business. In other words, if your business buys from, sells to, or pays fees to a related company or person, you should take note of the rules described here.
1. When TP Rules Apply
You must prepare Transfer Pricing (TP) documentation (Local File) if ANY ONE of the following applies in a tax year:
• Annual turnover < KHR 8 billion (~USD 2 million) and total assets < KHR 4 billion (~USD 1 million)
• Total value of related-party transactions (goods, services, assets, royalties) < KHR 1 billion (~USD 250,000)
If your transactions are below these amounts, full documentation is not required, but prices should still be reasonable and market-based.
2. Loan Exemptions
Some businesses do not need detailed loan documentation:
• Companies less than three years old
• Single-member private limited companies borrowing from a shareholder (loan < KHR 3 billion / USD 750,000)
• Sole proprietorships borrowing from owner, spouse, or dependent children
3. Filing Deadline
• For calendar-year taxpayers (1 Jan – 31 Dec), the Annual Tax on Income (TOI) return is due by 31 March of the following year.
• Prakas 574 applies from 1 Jan 2025.
• TP documentation is not filed with the Annual ToI, but it must already be prepared and available at the time of filing. It must be submitted within 30 working days if requested by the GDT.
Failure to comply may lead to extra tax, penalties, and interest.
4. Recommended Actions
• Prepare your TP file in advance; the tax office may request it during an Tax audit.
• Seek advice early if your transactions are large or meet the thresholds.
How We Can Help
We will continue to closely monitor developments and provide the latest information promptly from the General Department of Taxation.
Tax services to be implemented by licensed tax agents in Cambodia are provided by Cam Accounting & Tax Service Co., Ltd., a member firm of Kreston Global, holding GDT tax agent license, Accounting, Auditing and liquidator licenses from ACAR, and accredited by National Bank of Cambodia (NBC) and Trust Regulator (TR).
Our Audit, Tax & Accounting Expert
Ms. Haing Sivtieng, MIPA, MBA
Tax & Accounting Partner
Mobile: +855 89 777 589
Mr. Keat Heng, ACCA, CPA, FCCA
Audit Partner
Mobile : +855 12 753 257
E-mail : info@krestoncambodia.com
Website : www.krestoncambodia.com
