Tax returns deadlines are typically point to remember. The following Practical Tips should pay attention to takeaways and consult with tax experts to avoid penalties and interest:
- Making sure financial reporting up-to-date with full supporting documents such as purchase/sale invoice, agreement, and others relevant evidence.
- Scheduling properly with tax team when the working paper is completed and met the monthly taxes and annual taxes deadlines every year.
- Overcoming late penalty difficulty, lodgment tax and pay early (10% additional tax + 1.5% monthly interest on unpaid tax).
- Consulting with tax advisor or professional accounting firm which get to know the updated on Cambodian tax regulations and can handle tax issues with the General Department of Taxation.
- Keeping an eye on GDT Notification on Social Media Channel/website, whether GDT allows amendments past returns without penalty and then apply as soon as possible.
- Reviewing on key issues such as overseas customer/suppliers, fringe benefits, and related-party transactions (purchase, sale, management fee, and financing arrangement).
In Cambodia, the main penalties for late tax filing or improper tax return are:
- Late penalty
If your tax return submit after the deadline and unpaid, GTD may impose 10% additional tax on the amount outstanding.
- Penalty plus interest
When you miss deadline of tax returns and unpaid, GTD may impose 1.5% monthly interest on the owed tax, counting from the day after the deadline.
- Penalty for improper filing
When significant error on tax returns has been found by Tax officer without amending punctually, GDT can charge 10% tax additionally on the understated amount.
- Criminal penalties non-compliance
if you have severely committed tax evasion, failure registration tax identification, or recurrent non-filing, GDT may take criminal action with penalties and likely imprisonment.
Practical impression
When you submit tax returns late and be in debt tax, you may face 10% additional tax of late penalty plus 1.5% monthly interest on the owed tax until paid.
For example:
– After 1 month late: 10% + 1.5% = 11.5% of tax liability amount
– After 3 months late: 10% + 4.5% = 14.5% of tax liability amount
– After 6 months late: 10% + 9% = 19% of tax liability amount
The best solution for tax return submission and payment is punctual both monthly and annually deadline.
How We Can Help
We will continue to closely monitor developments and provide the latest information promptly from the Ministry of Economy and Finance (MEF), the Ministry of Commerce (MoC), the General Department of Taxation (GDT), and the Ministry of Labour and Vocational Training (MLVT), the Ministry of Industrial and Handicrafts (MIH), the Ministry of Mines and Energy (MME), and the Council for the Development of Cambodia (CDC).
Taxation Outsource Services to be implemented by Cam Accounting & Tax Service Co., Ltd., a member firm of Kreston Global, holding a GDT tax agent license, Accounting, Auditing, and liquidator licenses from ACAR, and accredited by the National Bank of Cambodia (NBC) and Trust Regulator (TR).
Our Corporate Secretary Services, Audit, Tax & Accounting Expert
Ms. Haing Sivtieng, MIPA, MBA
Accounting & Tax Partner
Chinese Line: +855 89 777 589
English line: +855 93 33 5158
Mr. Keat Heng, ACCA, CPA, FCCA
Partner
Mobile: +855 12 753 257
E-mail : info@krestoncambodia.com
Website: www.krestoncambodia.com
