V. Cambodia: A Note on the Tax System¹

1. This chapter presents the key features of Cambodia’s tax system (see details in the Summary of the Cambodian Tax System) and assesses its performance in a regional context. There is also a description of the main changes to the tax system in 2007.

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Cambodia: Central Government Revenue Collection

(in percent of GDP; excluding capital revenue)

Citation: IMF Staff Country Reports 2007, 291; 10.5089/9781451821857.002.A005

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2. Cambodia’s tax revenue is collected by the Tax Department (TD) and the Customs and Excise Department (CED). CED currently collects more than 60 percent of tax revenue. Given Cambodia’s opening to trade and its obligations under WTO and ASEAN membership, the dependence on trade taxes is a source of fiscal vulnerability.

3. The tax structure is broadly comparable to those of countries in the region (see table). Direct taxes consist of the profit tax (at a standard rate of 10 percent) and the tax on salaries (0–20 percent). The main indirect tax is the value added tax (VAT), at a rate of 10 percent. Cambodia’s tax system also includes a turnover tax applicable to taxpayers for which the turnover is below the VAT threshold. Excises are collected on locally produced and imported products, such as beer, soft drinks and cigarettes. Local taxes are marginal, in the absence of a property tax.

Table 1.

Tax System versus Countries in the Region

(tax rate and revenue, in percent)

Sources: FAD database; and various staff reports.

^1/Non-oil revenue for Vietnam and Indonesia.

Table 1.

Tax System versus Countries in the Region

(tax rate and revenue, in percent)

	CIT rate Standard	PIT rate	VAT rate Standard	Tax revenue to GDP 1/
Cambodia	20	0 - 20	10	8
China	30	5 - 45	17	16.6
Thailand	30	0 - 37	7	16
Vietnam	28	0 - 40	10	14
Taiwan, Prov. China	15 - 25	6 - 40	5	…
Singapore	18	0 - 21	5	13
Philipines	35	5 - 32	12	13
Korea	13 - 25	8 - 35	10	16
Indonesia	10 - 30	5 - 35	10	12

Sources: FAD database; and various staff reports.

^1/Non-oil revenue for Vietnam and Indonesia.

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Table 1.

Tax System versus Countries in the Region

(tax rate and revenue, in percent)

	CIT rate Standard	PIT rate	VAT rate Standard	Tax revenue to GDP 1/
Cambodia	20	0 - 20	10	8
China	30	5 - 45	17	16.6
Thailand	30	0 - 37	7	16
Vietnam	28	0 - 40	10	14
Taiwan, Prov. China	15 - 25	6 - 40	5	…
Singapore	18	0 - 21	5	13
Philipines	35	5 - 32	12	13
Korea	13 - 25	8 - 35	10	16
Indonesia	10 - 30	5 - 35	10	12

Sources: FAD database; and various staff reports.

^1/Non-oil revenue for Vietnam and Indonesia.

4. A recent staff study (Country Report No. 06/265) also found that Cambodia’s tax incentives appeared broadly as generous as those provided by countries in the region. Yet revenue collection is disappointing.

5. At 8 percent of GDP, the tax ratio is very low by regional standards. It is above 16 percent in China, Korea and Thailand. Cambodia’s low tax ratio is due to weak tax and customs administrations and extensive untaxed activities:

• Human capacity remains low, while very low public sector wages encourage corrupt practices (see chapter 1).

• The long unmanned border provides smuggling opportunities, especially on petroleum products (by sea), cars, cigarettes and beer. Petroleum taxation rates are higher than in either neighboring Thailand or Vietnam.

• The application of the tax system is inequitable (some activities are or are not taxed depending on the owner).

• Cooperation between the TD, CED and the Ministry of Commerce (in charge of company registration) is not strong, which limits cross-checks by the TD.

• A large share of the formal economy is not fully covered by the tax system. For example, garment activities, which recorded a five-fold increase between 1999 and 2006, benefit from generous incentives (tax holidays, reduced CIT tax, exemption of import duties and VAT), and incomes distributed by the sector are not properly taxed.

• Wealth taxation is minimal. A recently introduced capital gains tax is not yet operational and efforts to set up effective property taxations were rejected in recent years by the National Assembly.

• The buoyancy of taxes is also constrained by administrative interventions. For example, the base for the excise on gasoline and diesel is set administratively at a low level (currently US$309 and US$267 a ton, respectively), and is adjusted infrequently.

• Not all taxes collected by line ministries flow to the national treasury, due to deficient control and sanction mechanisms.

6. The government’s medium-term revenue strategy is to reduce progressively the reliance on customs revenue, by strengthening the domestic tax revenue base. At the same time, they have undertaken to modernize the CED, including a reform of import valuation,² and the fight against smuggling. CED revenue gains are predicated on a new regulatory framework that will be facilitated by the imminent passage of the customs law.

7. Over the coming years, the authorities are contemplating measures to strengthen revenue mobilization, while improving the efficiency and equity of the tax system. Among new tax initiatives, they plan to broaden the VAT base and to enhance property taxation:

• The VAT coverage could be extended to the consumption of electricity and water (above a certain threshold).

• The introduction of a property tax would help bring into the tax net the wealth created over recent years of high GDP growth and which is being directed into construction activities and land speculation.

Taxation of petroleum products based on the transaction value could also be helpful.

8. The following changes have taken place since 2006 (relative to Country Report No. 06/265):

• Profits and income. A capital gain tax on physical persons was introduced in the context of the 2007 budget. Implementation regulations are still being prepared.

• VAT. An exemption was introduced on the imports of seeds, breeding animals, and planting/fertilizing/harvesting/post-harvesting machineries, including combines and two-wheeled tractors.

• Excises. The tax base on locally produced goods is now 65 percent of the retail price (a proxy for the ex-refinery price).

• Hotel accommodation tax. The implementation started in 2007.

• Export tax. The export of sand, gravel and granite is now taxed.

Summary of the Cambodian Tax System May 2007

Tax	Nature of Tax	Exemptions and deductions	Rates
1. Tax on income, profits, and capital gains
Tax on Salary	A monthly tax imposed on salary that has been received within the framework of fulfilling employment activities. A physical person resident in the Kingdom of Cambodia is liable to the tax on salary for Cambodian source salary and foreign source salary. A non-resident physical person is liable to the tax on salary for Cambodian source salary.	Exempted from tax on salary are: (i) Salaries of officers and employees of a diplomatic and consular mission; foreign representative, officials and employees of international organizations and agencies of technical cooperation of other governments; (ii) members of the Parliament and Senate, (iii) Real refunds on professional expenses; (iv) indemnity for the layoff; (v) additional remuneration with social characteristics provided under the Labor Law; (vi) supply gains or below acquisition cost of special uniforms or professional equipment; and (vii) a flat allowance for mission and travel expenses.	Progressive tax rates applied to monthly income as follows: (i) 0 percent for CR 0 to 500,000; (ii) 5 percent for CR 500,001 to 1,250,000; (iii) 10 percent for CR 1,250,001 to 8,500,000; (iv) 15 percent for CR 8,500,001 to 12,500,000; (v) 20 percent for over CR 12,000,000. For a non-resident taxpayer, 20 percent are withheld by the employer.
		Deductions of CR 75,000 from the tax base per month for each minor dependent child and spouse without occupation.
	A monthly tax on fringe benefits withheld at source. Fringe benefits are valued at fair market value.	Officers and employees of a diplomatic and consular mission; foreign representative, officials and employees of international organizations and agencies of technical cooperation of other governments; and member of the Parliament and Senate.	20 percent of the total values of fringe benefits are withheld by the employer.
Tax on property rental	A tax on receipts from rents on land, buildings, and certain equipment paid by the owner.	Property owners whose monthly income from rent is below CR 500,000 under the estimate regime are exempted.	10 percent of income from rent.
Tax on profits	An annual tax on the profits of businesses, including capital gains from the sale of assets during the operation or at the close of the business, as well as income from financial of investments, interest, rental, and royalties’ income. The assessment of the tax on profit shall be made according to the real regime (accounts-based profits), simplified regime, or estimated system of taxation (a proxy profit tax based on estimated turnover). Dividend:. Additional tax on dividend distribution of retained earnings or annual profits.	Exemptions under the Law on Taxation include: (i) the income of the Royal Government and institutions of the Royal Government; (ii) the income of any organizations for religious, charitable, scientific, literary, or education purposes; (iii) the income of labor organizations and any chamber of commerce, industry, or agriculture; and (iv) the profit from the sale of agricultural produce. In addition, under the Law on Investment, exemptions can be granted by the Council for the Development of Cambodia (CDC). Deductions allowed from the tax on profits are: (i) interest expenses that the taxpayer has paid or incurred during the tax year to carry on business; (ii) depreciation of tangible, and intangible property, and natural resources, and (iii) charitable contributions. Carry forward of losses is also allowed. This additional profit tax shall not apply on the distribution of retained earning or annual profit after tax, if an enterprise has already paid profit tax at the normal rate of 20 percent for a legal person, or the rate of 30 percent for an oil or natural gas production sharing contract and the exploitation of natural resources including timber, ore, gold, and precious stones.	For corporations, the tax rates are as follows: (i) 0 percent for a Qualified Investment Project (QIP) during the period of tax exemption and 9 percent for 5 years of transitional period; (ii) 30 percent for enterprises engaged in production or exploitation of oil, gas and natural resources including timber, ore, gold, and precious stones; (iii) 20 percent for profits realized by legal persons; and (iv) 5 percent of gross premiums for insurance companies. For non-corporations, progressive rates applied to annual profits are as follows: (i) 0 percent for 0 to CR 6,000,000; (ii) 5 percent for CR 600,0001 to 15,000,000; (iii) 10 percent for CR 15,000,001 to 102,000,000; (iv) 15 percent for CR 102,000,001 to 150,000,000; and (v) 20 percent for income greater than CR 150,000,000. (i) 20 percent of retained earnings, if an enterprise is distributing profits that were subject to 0 percent profit rate. (ii) 11/91 of retained earnings, if an enterprise is distributing profits that were subject to 9 percent profit rate. (iii) 0 percent of retained earnings, if an enterprise is distributing profits that were subject to 20 percent profit rate.
•	Withholding tax: Any resident taxpayer carrying out a business and who makes any payment in cash or in kind to a resident taxpayer and non-resident taxpayer shall withhold.	Exemptions apply to: (i) interest paid to a domestic bank or saving institution; (ii) the payment of tax exempt income to government institutions; any religious, charitable, science, literary, or educational organization; labor organization or any chamber of commerce, industry, or agriculture; and (iii) profit from sale of small agricultural producer.	The following amounts are to be withheld by resident taxpayers making a payment to a resident taxpayer: (i) 15 percent on income received by a non-real regime taxpayer from performance of services including management, consulting, and similar services, as well as royalties for intangibles; (ii) 10 percent on the income from the rental of movable and immovable property; (iii) 6 percent on interest paid by domestic banks to resident taxpayers having a fixed term deposit account; and (iv) 4 percent on interest paid by a domestic bank to a resident taxpayer having a non-fixed savings account. The following amounts are to be withheld by resident taxpayers making a payment to a non-resident taxpayer: (i) 14 percent on interest, royalties, rent, and income connected with use of property, management or technical service, and dividends.
	Capital gain tax on physical persons (Financial Act 2007). Implementation regulations are being prepared.
2. Patent Tax	An annual registration or license fee levied on all businesses, industries, and services. The base is the previous year’s turnover, or estimated turnover. New businesses are taxed on the basis of a provisional estimate.	None	For business and industries, the patent is levied according to annual turnover as follows: (i) CR 0–7,500,000 = CR 15,000; (ii) CR 7,500,001–12,500,000 = CR 21,000; (iii) CR 12,500,001–25,000,000 = CR 27,000; (iv) CR 25,000,001–30,000,000 = CR 40,000; (v) CR 30,000,001–37,500,000 =CR 60,000; (vi) CR 37,500,001–50,000,000 = CR 90,000; (vii) CR 50,000,001–62,000,000 = CR 140,000; (viii) CR 62,000,001–75,000,000 = CR 180,000; (ix) CR 75,000,001–1 million = CR 240,000, (x) CR 100,000,001–1 billion (max.) = 0.1 percent of turnover. For services, the patent is levied according to annual turnover as follows: (i) CR 0–3,000,000 = CR 15,000; (ii) CR 3,000,001–5,000,000 = CR 21,000; (iii) CR 5,000,001–10,000,000 = CR 27,000; (iv) CR 10,000,001–12,000,000 = CR 40,000; (v) CR 12,000,001–15,000,000 = CR 60,000; (vi) CR 15,000,001–20,000,000 = CR 90,000; (vii) CR 20,000,001–24,800,000 = CR 140,000; (viii) CR 24,800,001–30,000,000 = CR 180,000; (ix) CR 30,000,001–40,000,000 = CR 240,000, (x) CR 40,000,001–400,000,000 (max.) = 0.25 percent of turnover.
3. Taxes on domestic goods or services
VAT	Value-added tax, applied to any person subject to the Real Regime system. It covers both goods and services, extending through all stages of importation, production and distribution.	Exempted from the VAT are: (i) public postal service, (ii) hospitals, clinics, medical and dental services, and the sale of medical and dental goods, (iii) public transportation services, (iv) insurance services, (v) primary financial services, (vi) the import of goods for personal use exempted from customs duties, (vii) nonprofit activities in the public interest, (viii) the import of goods for or by foreign diplomats and consular missions, international organizations and agencies of technical cooperation of other governments for use in the exercise of their official function, and (ix) the imports of seeds, breeding animals, and planting/fertilizing/harvesting/post-harvesting machineries, including combines and two-wheeled tractors. An ad-hoc exemption provided to supporting industries or contractors (which is not a QIP) which supply products or services for export-oriented garment industries. The calculation of tax payable in a tax period, a credit is allowed to the taxable person for the tax payable in respect of: (i) all taxable supplies made to that person during the tax period, (ii) all imports of goods by that person during the tax period. The credit is only allowed if the supply or import is for use for taxable supplies of the taxable person. Shall not be allowed input tax credit for any tax paid on: (i) purchases or imports of automobiles, unless the taxable person is in the business of dealing in, or hiring such automobiles, (ii) entertainment, amusement and recreation expenses, unless the taxable person is in the business of providing entertainment, amusement, and recreation, (iii) purchases of petroleum products for use as road fuel, unless the taxable person is in the business of supplying petroleum products.	Uniform rate of 10 percent.
Turnover tax	This tax is applied to persons subject to the estimated regime system. It is imposed on supply of both goods and services in the Kingdom of Cambodia. This tax is monthly payable.	The incomes from the sale of agricultural products that are habitual agricultural work of farmers (not those sold by traders).	Uniform rate of 2 percent.
Minimum tax	The Minimum Tax is imposed at the rate of one percent of the annual turnover inclusive of all taxes, except Value Added Tax, and is payable at the time of the annual liquidation of the tax on profit.	An exemption has been provided to those taxpayers that have been granted the status of Qualified Investment Project under the Law on Investment.	1 percent of annual turnover.
	The minimum tax may be reduced by the annual tax on profit.
Excise tax	A tax levied on select products, both locally produced and imported.	Exemptions apply to imports of 200 cigarettes; 2 liters of wine; petroleum products in your tank or machine up to 30 liters per car and 5 liters of oil per car.	Rates are as follows: (i) airline tickets–10 percent; (ii) telecommunication services–3 percent; (iii) motor vehicles–15 percent for cylinder capacity less than 1000 cc, and 45 percent for other cylinder capacity; (iv) spare parts for motor vehicles–25 percent, and for used spare part vehicle 10 percent; (v) motorcycles and spare parts–10 percent, and 5 percent; (vi) cigarettes–10 percent; (vii) cigars–25 percent; (viii) beer–20 percent; (ix) other alcoholic products (spirits and wine)–10 percent, and soft drinks–10 percent; (x) gasoline–33.33 percent; (xi) diesel 4.35 percent; (xii) kerosene and lamp kerosene–10 percent; (xiii) lubricating oil–25 percent; (xiv) white spirit and solvent–5 percent, and base oil, carbon, black feedstock oil, hydraulics oil and lubricating grease–10 percent; (xv) air conditioners, cosmetics, telephones, video and camera equipment–10 percent.
			Tax base: For certain merchandise of goods produced locally, the tax base is 65 percent of supply value excluding VAT that is recorded on invoice to customers.
Stamp tax	Stamps taxes are affixed on some documents such as proposal letter, status of companies, registration card of motor vehicles (motorcycles, cars, boats, ships, and others), driver license, billboards, and trademarks.	None.	The rates are applied as follows. (i) Physical person’s document must be affixed stamp tax from the value ranging from CR 100–CR 3,000; (ii) Legal person’s document must be affixed stamp tax from the value ranging from CR 100–CR 3,000; (iii) Stamp tax on billboards is based on their square meters.
4. Slaughter tax	Tax levied on slaughterhouses based on the value of the livestock that is slaughtered such as cows, buffalos and pigs.	Exempted from slaughter tax are livestock (i) slaughtered for celebrating national tradition, (ii) slaughtered for research uses, and (iii) killed in accident.	Uniform rate of 3 percent of the set price for each animal.
5. Property transfer tax	Tax levied on the transfer of rights of immovable properties in forms of sale, exchange, donation, and shareholding such as land and buildings Tax levied on the transfer of rights of movable properties such as motorcycles, cars, trucks, and ships. Documents acknowledging the transfers of rights related to company creation, merger closure, and supply contract for good and services to public organizations are taxed.	Transfers of property ordered by the State are exempted, as are government transfers, public utilities, and charitable organizations. The purchases of motor vehicles in terms of goods for businesses which paid patent and profit tax	- 4 percent of selling values paid by purchaser on movable and immovable property; - CR 100,000 or more on the documents.
6. Tax on Unused Land	Tax levied on land that is not used and has no building. Continue preparing regulations to implement it.	Financial Act 2007 abolished an exemption on land area of 1,200 square meters.	2 percent of land value determined by land committee.
7. Taxes on international trade
Import duties	Effective January 2004 a general tariff (based on the Harmonized System classification) has been levied on all imports. All rates are ad valorem and duties are levied on c.i.f basis, except for a number of products including automobiles, petroleum products, steel, cigarette, and chemical fertilizers. For these products, values for duty purposes are fixed by the Minister of Economy and Finance.	Exempted from import duties are: (i) imports for projects and investments approved by the CDC, on approval at the time of import; (ii) insecticides, pesticides, and agricultural machinery (excluding tractors); and (iii) imports of embassies, international organizations providing humanitarian aid, and projects financed through bilateral grants and aid.	There are essentially four rate categories: (i) 0 percent for essential goods, seed and basic raw materials; (ii) 7 percent for intermediate goods and others; (iii) 15 percent for machinery and equipment; and (iv) 35 percent for luxury goods including automobiles. Petroleum products: (i) Gasoline: 35 percent of the prescribed value of $309 per ton. (ii) Diesel: 15 percent of the prescribed value of $267 per ton.
Additional tax	Levied on selected imported products.	None.	(i) Gasoline: 2 cents per liter; (ii) Diesel: 4 cents per liter.
Export Taxes
Tax on timber	Ad valorem tax levied on the value of processed woods at export. Exports of woods are limited to those cut on government-agreed concessions. An export ban on all logs was introduced on December 31, 1996.	None.	10 percent.
Tax on rubber	Ad valorem tax levied on rubber.	None.	2, 5, or 10 percent.
Other products	Ad valorem tax levied on livestock and fishery products.	None.	10 percent.
	Ad valorem tax levied on sand, gravel, and granite	None.	10 percent
8. Other tax
Means of transportation tax	Annual levy on automobiles and boats.	Exempted vehicles: ambulance and fire truck; vehicles of the Royal Cambodia Force, military police, national police; vehicles owned by diplomatic missions and international organizations.	(i) Trucks - 0-3 tons: CR 150,000 -3-10 tons: CR 250,000; - 10 - 20 tons: CR 450,000; and - Over 20 tons: CR 750,000; (ii) Buses: from CR 150,000 to CR 250,000; (iii) Passenger cars: -12-17 horsepower: CR 250,000 (less than 5 years) or CR 180,000 (more than 5 years); - 17-24 horsepower: CR 800,000 (less than 5 years), or CR 600,000 CR (more than 5 years); - Over 24 horsepower: CR 1,000,000; (iv) Motorcars over 12 horsepower: CR 87,500 -125,000 (v) Tractors 35–83 horsepower: CR 30,000 - 50,000; (vi) Motorcycles 50-125 cm3: CR 3,000 - 7,500; (vii) Ships: CR 10,000 - 500,000; (viii) Fishing boats: CR 20,000 - 1,200,000.
Public Lighting Tax	Tax levied on purchase of wine and cigarettes.	None.	3 percent on the selling value.
Tax on Accommodation (Financial Act 2005)	This tax levies on hotels, hotel apartments, suite hotels, resort hotels, motels, lodges, bungalows, guesthouses, tourist camping’s, and others.	Rental apartment for short and long term	2 percent on the rental price excluding VAT per room

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Tax	Nature of Tax	Exemptions and deductions	Rates
1. Tax on income, profits, and capital gains
Tax on Salary	A monthly tax imposed on salary that has been received within the framework of fulfilling employment activities. A physical person resident in the Kingdom of Cambodia is liable to the tax on salary for Cambodian source salary and foreign source salary. A non-resident physical person is liable to the tax on salary for Cambodian source salary.	Exempted from tax on salary are: (i) Salaries of officers and employees of a diplomatic and consular mission; foreign representative, officials and employees of international organizations and agencies of technical cooperation of other governments; (ii) members of the Parliament and Senate, (iii) Real refunds on professional expenses; (iv) indemnity for the layoff; (v) additional remuneration with social characteristics provided under the Labor Law; (vi) supply gains or below acquisition cost of special uniforms or professional equipment; and (vii) a flat allowance for mission and travel expenses.	Progressive tax rates applied to monthly income as follows: (i) 0 percent for CR 0 to 500,000; (ii) 5 percent for CR 500,001 to 1,250,000; (iii) 10 percent for CR 1,250,001 to 8,500,000; (iv) 15 percent for CR 8,500,001 to 12,500,000; (v) 20 percent for over CR 12,000,000. For a non-resident taxpayer, 20 percent are withheld by the employer.
		Deductions of CR 75,000 from the tax base per month for each minor dependent child and spouse without occupation.
	A monthly tax on fringe benefits withheld at source. Fringe benefits are valued at fair market value.	Officers and employees of a diplomatic and consular mission; foreign representative, officials and employees of international organizations and agencies of technical cooperation of other governments; and member of the Parliament and Senate.	20 percent of the total values of fringe benefits are withheld by the employer.
Tax on property rental	A tax on receipts from rents on land, buildings, and certain equipment paid by the owner.	Property owners whose monthly income from rent is below CR 500,000 under the estimate regime are exempted.	10 percent of income from rent.
Tax on profits	An annual tax on the profits of businesses, including capital gains from the sale of assets during the operation or at the close of the business, as well as income from financial of investments, interest, rental, and royalties’ income. The assessment of the tax on profit shall be made according to the real regime (accounts-based profits), simplified regime, or estimated system of taxation (a proxy profit tax based on estimated turnover). Dividend:. Additional tax on dividend distribution of retained earnings or annual profits.	Exemptions under the Law on Taxation include: (i) the income of the Royal Government and institutions of the Royal Government; (ii) the income of any organizations for religious, charitable, scientific, literary, or education purposes; (iii) the income of labor organizations and any chamber of commerce, industry, or agriculture; and (iv) the profit from the sale of agricultural produce. In addition, under the Law on Investment, exemptions can be granted by the Council for the Development of Cambodia (CDC). Deductions allowed from the tax on profits are: (i) interest expenses that the taxpayer has paid or incurred during the tax year to carry on business; (ii) depreciation of tangible, and intangible property, and natural resources, and (iii) charitable contributions. Carry forward of losses is also allowed. This additional profit tax shall not apply on the distribution of retained earning or annual profit after tax, if an enterprise has already paid profit tax at the normal rate of 20 percent for a legal person, or the rate of 30 percent for an oil or natural gas production sharing contract and the exploitation of natural resources including timber, ore, gold, and precious stones.	For corporations, the tax rates are as follows: (i) 0 percent for a Qualified Investment Project (QIP) during the period of tax exemption and 9 percent for 5 years of transitional period; (ii) 30 percent for enterprises engaged in production or exploitation of oil, gas and natural resources including timber, ore, gold, and precious stones; (iii) 20 percent for profits realized by legal persons; and (iv) 5 percent of gross premiums for insurance companies. For non-corporations, progressive rates applied to annual profits are as follows: (i) 0 percent for 0 to CR 6,000,000; (ii) 5 percent for CR 600,0001 to 15,000,000; (iii) 10 percent for CR 15,000,001 to 102,000,000; (iv) 15 percent for CR 102,000,001 to 150,000,000; and (v) 20 percent for income greater than CR 150,000,000. (i) 20 percent of retained earnings, if an enterprise is distributing profits that were subject to 0 percent profit rate. (ii) 11/91 of retained earnings, if an enterprise is distributing profits that were subject to 9 percent profit rate. (iii) 0 percent of retained earnings, if an enterprise is distributing profits that were subject to 20 percent profit rate.
•	Withholding tax: Any resident taxpayer carrying out a business and who makes any payment in cash or in kind to a resident taxpayer and non-resident taxpayer shall withhold.	Exemptions apply to: (i) interest paid to a domestic bank or saving institution; (ii) the payment of tax exempt income to government institutions; any religious, charitable, science, literary, or educational organization; labor organization or any chamber of commerce, industry, or agriculture; and (iii) profit from sale of small agricultural producer.	The following amounts are to be withheld by resident taxpayers making a payment to a resident taxpayer: (i) 15 percent on income received by a non-real regime taxpayer from performance of services including management, consulting, and similar services, as well as royalties for intangibles; (ii) 10 percent on the income from the rental of movable and immovable property; (iii) 6 percent on interest paid by domestic banks to resident taxpayers having a fixed term deposit account; and (iv) 4 percent on interest paid by a domestic bank to a resident taxpayer having a non-fixed savings account. The following amounts are to be withheld by resident taxpayers making a payment to a non-resident taxpayer: (i) 14 percent on interest, royalties, rent, and income connected with use of property, management or technical service, and dividends.
	Capital gain tax on physical persons (Financial Act 2007). Implementation regulations are being prepared.
2. Patent Tax	An annual registration or license fee levied on all businesses, industries, and services. The base is the previous year’s turnover, or estimated turnover. New businesses are taxed on the basis of a provisional estimate.	None	For business and industries, the patent is levied according to annual turnover as follows: (i) CR 0–7,500,000 = CR 15,000; (ii) CR 7,500,001–12,500,000 = CR 21,000; (iii) CR 12,500,001–25,000,000 = CR 27,000; (iv) CR 25,000,001–30,000,000 = CR 40,000; (v) CR 30,000,001–37,500,000 =CR 60,000; (vi) CR 37,500,001–50,000,000 = CR 90,000; (vii) CR 50,000,001–62,000,000 = CR 140,000; (viii) CR 62,000,001–75,000,000 = CR 180,000; (ix) CR 75,000,001–1 million = CR 240,000, (x) CR 100,000,001–1 billion (max.) = 0.1 percent of turnover. For services, the patent is levied according to annual turnover as follows: (i) CR 0–3,000,000 = CR 15,000; (ii) CR 3,000,001–5,000,000 = CR 21,000; (iii) CR 5,000,001–10,000,000 = CR 27,000; (iv) CR 10,000,001–12,000,000 = CR 40,000; (v) CR 12,000,001–15,000,000 = CR 60,000; (vi) CR 15,000,001–20,000,000 = CR 90,000; (vii) CR 20,000,001–24,800,000 = CR 140,000; (viii) CR 24,800,001–30,000,000 = CR 180,000; (ix) CR 30,000,001–40,000,000 = CR 240,000, (x) CR 40,000,001–400,000,000 (max.) = 0.25 percent of turnover.
3. Taxes on domestic goods or services
VAT	Value-added tax, applied to any person subject to the Real Regime system. It covers both goods and services, extending through all stages of importation, production and distribution.	Exempted from the VAT are: (i) public postal service, (ii) hospitals, clinics, medical and dental services, and the sale of medical and dental goods, (iii) public transportation services, (iv) insurance services, (v) primary financial services, (vi) the import of goods for personal use exempted from customs duties, (vii) nonprofit activities in the public interest, (viii) the import of goods for or by foreign diplomats and consular missions, international organizations and agencies of technical cooperation of other governments for use in the exercise of their official function, and (ix) the imports of seeds, breeding animals, and planting/fertilizing/harvesting/post-harvesting machineries, including combines and two-wheeled tractors. An ad-hoc exemption provided to supporting industries or contractors (which is not a QIP) which supply products or services for export-oriented garment industries. The calculation of tax payable in a tax period, a credit is allowed to the taxable person for the tax payable in respect of: (i) all taxable supplies made to that person during the tax period, (ii) all imports of goods by that person during the tax period. The credit is only allowed if the supply or import is for use for taxable supplies of the taxable person. Shall not be allowed input tax credit for any tax paid on: (i) purchases or imports of automobiles, unless the taxable person is in the business of dealing in, or hiring such automobiles, (ii) entertainment, amusement and recreation expenses, unless the taxable person is in the business of providing entertainment, amusement, and recreation, (iii) purchases of petroleum products for use as road fuel, unless the taxable person is in the business of supplying petroleum products.	Uniform rate of 10 percent.
Turnover tax	This tax is applied to persons subject to the estimated regime system. It is imposed on supply of both goods and services in the Kingdom of Cambodia. This tax is monthly payable.	The incomes from the sale of agricultural products that are habitual agricultural work of farmers (not those sold by traders).	Uniform rate of 2 percent.
Minimum tax	The Minimum Tax is imposed at the rate of one percent of the annual turnover inclusive of all taxes, except Value Added Tax, and is payable at the time of the annual liquidation of the tax on profit.	An exemption has been provided to those taxpayers that have been granted the status of Qualified Investment Project under the Law on Investment.	1 percent of annual turnover.
	The minimum tax may be reduced by the annual tax on profit.
Excise tax	A tax levied on select products, both locally produced and imported.	Exemptions apply to imports of 200 cigarettes; 2 liters of wine; petroleum products in your tank or machine up to 30 liters per car and 5 liters of oil per car.	Rates are as follows: (i) airline tickets–10 percent; (ii) telecommunication services–3 percent; (iii) motor vehicles–15 percent for cylinder capacity less than 1000 cc, and 45 percent for other cylinder capacity; (iv) spare parts for motor vehicles–25 percent, and for used spare part vehicle 10 percent; (v) motorcycles and spare parts–10 percent, and 5 percent; (vi) cigarettes–10 percent; (vii) cigars–25 percent; (viii) beer–20 percent; (ix) other alcoholic products (spirits and wine)–10 percent, and soft drinks–10 percent; (x) gasoline–33.33 percent; (xi) diesel 4.35 percent; (xii) kerosene and lamp kerosene–10 percent; (xiii) lubricating oil–25 percent; (xiv) white spirit and solvent–5 percent, and base oil, carbon, black feedstock oil, hydraulics oil and lubricating grease–10 percent; (xv) air conditioners, cosmetics, telephones, video and camera equipment–10 percent.
			Tax base: For certain merchandise of goods produced locally, the tax base is 65 percent of supply value excluding VAT that is recorded on invoice to customers.
Stamp tax	Stamps taxes are affixed on some documents such as proposal letter, status of companies, registration card of motor vehicles (motorcycles, cars, boats, ships, and others), driver license, billboards, and trademarks.	None.	The rates are applied as follows. (i) Physical person’s document must be affixed stamp tax from the value ranging from CR 100–CR 3,000; (ii) Legal person’s document must be affixed stamp tax from the value ranging from CR 100–CR 3,000; (iii) Stamp tax on billboards is based on their square meters.
4. Slaughter tax	Tax levied on slaughterhouses based on the value of the livestock that is slaughtered such as cows, buffalos and pigs.	Exempted from slaughter tax are livestock (i) slaughtered for celebrating national tradition, (ii) slaughtered for research uses, and (iii) killed in accident.	Uniform rate of 3 percent of the set price for each animal.
5. Property transfer tax	Tax levied on the transfer of rights of immovable properties in forms of sale, exchange, donation, and shareholding such as land and buildings Tax levied on the transfer of rights of movable properties such as motorcycles, cars, trucks, and ships. Documents acknowledging the transfers of rights related to company creation, merger closure, and supply contract for good and services to public organizations are taxed.	Transfers of property ordered by the State are exempted, as are government transfers, public utilities, and charitable organizations. The purchases of motor vehicles in terms of goods for businesses which paid patent and profit tax	- 4 percent of selling values paid by purchaser on movable and immovable property; - CR 100,000 or more on the documents.
6. Tax on Unused Land	Tax levied on land that is not used and has no building. Continue preparing regulations to implement it.	Financial Act 2007 abolished an exemption on land area of 1,200 square meters.	2 percent of land value determined by land committee.
7. Taxes on international trade
Import duties	Effective January 2004 a general tariff (based on the Harmonized System classification) has been levied on all imports. All rates are ad valorem and duties are levied on c.i.f basis, except for a number of products including automobiles, petroleum products, steel, cigarette, and chemical fertilizers. For these products, values for duty purposes are fixed by the Minister of Economy and Finance.	Exempted from import duties are: (i) imports for projects and investments approved by the CDC, on approval at the time of import; (ii) insecticides, pesticides, and agricultural machinery (excluding tractors); and (iii) imports of embassies, international organizations providing humanitarian aid, and projects financed through bilateral grants and aid.	There are essentially four rate categories: (i) 0 percent for essential goods, seed and basic raw materials; (ii) 7 percent for intermediate goods and others; (iii) 15 percent for machinery and equipment; and (iv) 35 percent for luxury goods including automobiles. Petroleum products: (i) Gasoline: 35 percent of the prescribed value of $309 per ton. (ii) Diesel: 15 percent of the prescribed value of $267 per ton.
Additional tax	Levied on selected imported products.	None.	(i) Gasoline: 2 cents per liter; (ii) Diesel: 4 cents per liter.
Export Taxes
Tax on timber	Ad valorem tax levied on the value of processed woods at export. Exports of woods are limited to those cut on government-agreed concessions. An export ban on all logs was introduced on December 31, 1996.	None.	10 percent.
Tax on rubber	Ad valorem tax levied on rubber.	None.	2, 5, or 10 percent.
Other products	Ad valorem tax levied on livestock and fishery products.	None.	10 percent.
	Ad valorem tax levied on sand, gravel, and granite	None.	10 percent
8. Other tax
Means of transportation tax	Annual levy on automobiles and boats.	Exempted vehicles: ambulance and fire truck; vehicles of the Royal Cambodia Force, military police, national police; vehicles owned by diplomatic missions and international organizations.	(i) Trucks - 0-3 tons: CR 150,000 -3-10 tons: CR 250,000; - 10 - 20 tons: CR 450,000; and - Over 20 tons: CR 750,000; (ii) Buses: from CR 150,000 to CR 250,000; (iii) Passenger cars: -12-17 horsepower: CR 250,000 (less than 5 years) or CR 180,000 (more than 5 years); - 17-24 horsepower: CR 800,000 (less than 5 years), or CR 600,000 CR (more than 5 years); - Over 24 horsepower: CR 1,000,000; (iv) Motorcars over 12 horsepower: CR 87,500 -125,000 (v) Tractors 35–83 horsepower: CR 30,000 - 50,000; (vi) Motorcycles 50-125 cm3: CR 3,000 - 7,500; (vii) Ships: CR 10,000 - 500,000; (viii) Fishing boats: CR 20,000 - 1,200,000.
Public Lighting Tax	Tax levied on purchase of wine and cigarettes.	None.	3 percent on the selling value.
Tax on Accommodation (Financial Act 2005)	This tax levies on hotels, hotel apartments, suite hotels, resort hotels, motels, lodges, bungalows, guesthouses, tourist camping’s, and others.	Rental apartment for short and long term	2 percent on the rental price excluding VAT per room

Cambodia: Basic Data, 2001–06

Sources: Cambodian authorities; and Fund staff estimates.

^1/As a percent of beginning broad money stock. Represents contributions to 12-month changes of broad money.

^2/Excluding re-exports.

^3/Including gold holdings.

^4/Russian Federation debt is valued at 0.6 USSR roubles per US$ with the standard 70 percent discount.

Cambodia: Basic Data, 2001–06

			2001	2002	2003	2004	2005	2006
Population
	Total population (mid-year)		12.9	13.1	13.3	13.5	13.8	14.2
	Population growth rate (annual percentage change)		1.6	1.7	1.7	1.7	2.1	2.4
Gross domestic product (GDP; at current prices)
	(in billions of riels)		15,617	16,756	18,508	21,343	25,693	29,809
	(in millions of U.S. dollars)		3,980	4,277	4,650	5,308	6,271	7,254
	(in U.S. dollars; per capita)		309	326	349	392	454	512
			(Annual percentage change)
Real GDP, of which:			8.0	6.5	8.5	10.0	13.5	10.8
	Agriculture, fisheries, and forestry		3.6	-2.5	10.5	-0.9	15.7	5.5
	Industry		11.2	17.1	12.0	16.6	12.7	18.3
	Services		10.8	7.6	5.9	13.3	12.7	10.3
			(In percent of GDP)
Saving-investment balance
	Gross national saving		17.5	17.4	18.4	15.6	15.8	19.5
		Government	1.0	1.1	-0.5	1.4	1.8	2.3
		Nongovernment	16.5	16.3	18.9	14.2	14.1	17.2
	Gross investment		18.7	19.8	22.0	17.7	20.1	21.5
		Government	6.2	7.5	6.5	6.0	5.6	5.5
		Non-budgetary grant-financed investment	5.3	4.6	4.8	4.3	3.1	2.7
		Nongovernment	7.1	7.8	10.7	7.4	11.4	13.3
			(Annual percentage change)
Inflation
	Period average		0.2	3.3	1.2	3.8	5.9	4.7
	End of period		0.7	3.7	0.5	5.6	6.7	2.8
	GDP deflator		2.6	0.7	1.8	4.8	6.1	4.7
			(In percent of GDP)
General government budget
	Total revenue, of which:		10.0	10.5	9.6	10.3	10.3	11.5
		Tax revenue	7.2	7.4	6.6	7.7	7.6	8.0
		Nontax revenue	2.7	3.0	2.8	2.6	2.2	2.3
	Total expenditure, of which:		15.1	16.9	16.3	14.9	13.7	13.5
		Current expenditure	8.9	9.4	10.0	8.9	8.1	8.0
		Capital expenditure	6.2	7.5	6.5	6.0	5.6	5.5
	Overall fiscal balance (including grants)		-2.6	-3.6	-4.4	-2.9	-1.2	0.6
			(Annual percentage change)
Money and credit
	Broad money, of which:		20.4	31.1	15.0	30.4	16.1	38.2
		Riel in circulation 1/	4.5	8.5	4.9	6.2	3.9	6.3
	Foreign currency deposits 1/		16.0	21.0	10.4	23.4	11.8	32.0
	Credit to the economy 1/		-2.0	3.4	9.2	12.0	8.4	14.0
		Of which: credit to government (net) 1/	-4.3	-2.0	-0.3	-2.4	-4.9	-10.6
			(In percent; end of period)
Interest rates
	Riel savings deposits		2.0	1.9	1.9	1.9	2.0	1.9
	Foreign currency loans		15.0	18.6	18.2	17.3	17.3	16.2
			(In percent of GDP)
Balance of payments
	Current account balance (excluding official transfers)		-8.8	-9.5	-10.6	-8.2	-9.4	-7.2
	Current account balance (including official transfers)		-1.2	-2.4	-3.6	-2.2	-4.2	-2.0
		Exports of goods 2/	36.7	38.8	42.4	46.2	44.2	48.8
		Imports of goods 2/	54.3	57.1	59.6	64.1	65.6	68.8
			(In millions of U.S. dollars; unless otherwise indicated)
Foreign exchange reserves
	Gross official reserves 3/		548	663	737	809	915	1097
		(in months of imports of goods and services)	2.4	2.6	2.3	2.1	2.0	2.0
	Net international reserves 3/		468	568	634	713	834	1097
External debt
	Outstanding debt (in percent of GDP) 4/		33.4	36.4	38.9	38.5	33.9	31.0
	Debt service (in millions of U.S. dollars)		60	62	66	68	69	69
		(in percent of exports of goods and services)	3.0	2.7	2.6	1.5	1.3	1.1
			(In millions of SDRs)
Fund quota			87.5	87.5	87.5	87.5	87.5	87.5
			(In riels per U.S. dollar)
Exchange rate
	Period average		3,924	3,918	3,980	4,021	4,097	4,109
	End of period		3,900	3,935	3,980	4,031	4,116	4,046

Sources: Cambodian authorities; and Fund staff estimates.

^1/As a percent of beginning broad money stock. Represents contributions to 12-month changes of broad money.

^2/Excluding re-exports.

^3/Including gold holdings.

^4/Russian Federation debt is valued at 0.6 USSR roubles per US$ with the standard 70 percent discount.

View Table

Cambodia: Basic Data, 2001–06

			2001	2002	2003	2004	2005	2006
Population
	Total population (mid-year)		12.9	13.1	13.3	13.5	13.8	14.2
	Population growth rate (annual percentage change)		1.6	1.7	1.7	1.7	2.1	2.4
Gross domestic product (GDP; at current prices)
	(in billions of riels)		15,617	16,756	18,508	21,343	25,693	29,809
	(in millions of U.S. dollars)		3,980	4,277	4,650	5,308	6,271	7,254
	(in U.S. dollars; per capita)		309	326	349	392	454	512
			(Annual percentage change)
Real GDP, of which:			8.0	6.5	8.5	10.0	13.5	10.8
	Agriculture, fisheries, and forestry		3.6	-2.5	10.5	-0.9	15.7	5.5
	Industry		11.2	17.1	12.0	16.6	12.7	18.3
	Services		10.8	7.6	5.9	13.3	12.7	10.3
			(In percent of GDP)
Saving-investment balance
	Gross national saving		17.5	17.4	18.4	15.6	15.8	19.5
		Government	1.0	1.1	-0.5	1.4	1.8	2.3
		Nongovernment	16.5	16.3	18.9	14.2	14.1	17.2
	Gross investment		18.7	19.8	22.0	17.7	20.1	21.5
		Government	6.2	7.5	6.5	6.0	5.6	5.5
		Non-budgetary grant-financed investment	5.3	4.6	4.8	4.3	3.1	2.7
		Nongovernment	7.1	7.8	10.7	7.4	11.4	13.3
			(Annual percentage change)
Inflation
	Period average		0.2	3.3	1.2	3.8	5.9	4.7
	End of period		0.7	3.7	0.5	5.6	6.7	2.8
	GDP deflator		2.6	0.7	1.8	4.8	6.1	4.7
			(In percent of GDP)
General government budget
	Total revenue, of which:		10.0	10.5	9.6	10.3	10.3	11.5
		Tax revenue	7.2	7.4	6.6	7.7	7.6	8.0
		Nontax revenue	2.7	3.0	2.8	2.6	2.2	2.3
	Total expenditure, of which:		15.1	16.9	16.3	14.9	13.7	13.5
		Current expenditure	8.9	9.4	10.0	8.9	8.1	8.0
		Capital expenditure	6.2	7.5	6.5	6.0	5.6	5.5
	Overall fiscal balance (including grants)		-2.6	-3.6	-4.4	-2.9	-1.2	0.6
			(Annual percentage change)
Money and credit
	Broad money, of which:		20.4	31.1	15.0	30.4	16.1	38.2
		Riel in circulation 1/	4.5	8.5	4.9	6.2	3.9	6.3
	Foreign currency deposits 1/		16.0	21.0	10.4	23.4	11.8	32.0
	Credit to the economy 1/		-2.0	3.4	9.2	12.0	8.4	14.0
		Of which: credit to government (net) 1/	-4.3	-2.0	-0.3	-2.4	-4.9	-10.6
			(In percent; end of period)
Interest rates
	Riel savings deposits		2.0	1.9	1.9	1.9	2.0	1.9
	Foreign currency loans		15.0	18.6	18.2	17.3	17.3	16.2
			(In percent of GDP)
Balance of payments
	Current account balance (excluding official transfers)		-8.8	-9.5	-10.6	-8.2	-9.4	-7.2
	Current account balance (including official transfers)		-1.2	-2.4	-3.6	-2.2	-4.2	-2.0
		Exports of goods 2/	36.7	38.8	42.4	46.2	44.2	48.8
		Imports of goods 2/	54.3	57.1	59.6	64.1	65.6	68.8
			(In millions of U.S. dollars; unless otherwise indicated)
Foreign exchange reserves
	Gross official reserves 3/		548	663	737	809	915	1097
		(in months of imports of goods and services)	2.4	2.6	2.3	2.1	2.0	2.0
	Net international reserves 3/		468	568	634	713	834	1097
External debt
	Outstanding debt (in percent of GDP) 4/		33.4	36.4	38.9	38.5	33.9	31.0
	Debt service (in millions of U.S. dollars)		60	62	66	68	69	69
		(in percent of exports of goods and services)	3.0	2.7	2.6	1.5	1.3	1.1
			(In millions of SDRs)
Fund quota			87.5	87.5	87.5	87.5	87.5	87.5
			(In riels per U.S. dollar)
Exchange rate
	Period average		3,924	3,918	3,980	4,021	4,097	4,109
	End of period		3,900	3,935	3,980	4,031	4,116	4,046

Sources: Cambodian authorities; and Fund staff estimates.

^1/As a percent of beginning broad money stock. Represents contributions to 12-month changes of broad money.

^2/Excluding re-exports.

^3/Including gold holdings.

^4/Russian Federation debt is valued at 0.6 USSR roubles per US$ with the standard 70 percent discount.