Under a VAT system, output tax is collected from a customer by adding VAT to the amount charged. However, a business also pays input tax to its suppliers on purchases that it makes. The business must pay the output tax to the State after deducting the input tax paid to its suppliers. In theory, the business therefore pays tax on the value that it adds in the supply chain. The tax is ultimately borne by the end consumer, or a business that is exempt from tax, as these persons cannot recover input tax paid.


Cambodia’s VAT applies to the business activities of real regime taxpayers

Exempt goods and services:
VAT will not be payable in respect of a number of activities, including the supply of:

  • Public postal services;
  • Hospital and medical services, and the provision of goods incidental thereto;
  • Public transportation activities supported by state owned providers;
  • Insurance activities;
  • Primary financial activities;
  • The import of certain personal effects;
  • Non-profit activities in the public interest (as approved);
  • Electricity

If a business sells exempt goods or services, it will be unable to recover any input tax paid on its purchases. This contrasts with zero rating, where the sales are within the VAT system (albeit at a VAT rate of zero), and hence input tax can be recovered. Where a business generates both taxable and exempt sales, it will only be able to claim a deduction of input tax for the portion of inputs used in the taxable activity.


There are two rates as follows:

0% This rate applies only to goods exported from Cambodia and services consumed outside Cambodia. Exports are defined to include to include

10% This standard rate applies to all other non-exempt supplies.

Basis of Taxation
The output tax to be charged is calculated by multiplying the taxable value (net of VAT) by the applicable VAT rate. With respect to imported goods, VAT will be calculated on the CIF import price plus Import Duty plus any Specific Tax on Certain Merchandise and Services.

For goods sold on a hire purchase or financial lease basis, it appears VAT will be calculated on the total price and at the time of supply, rather than the installments actually received.

For goods made available under rental or periodic payment arrangements, the goods will be treated as being successively supplied.

Input credits will not be available for VAT charged on entertainment, petroleum products, mobile telephone calls or the purchase of passenger motor vehicles.

All real regime taxpayers making supplies of taxable goods and services in Cambodia must register for VAT.

QIP may register for VAT prior to making taxable supplies. This allows the taxpayer to claim VAT input credits and, in theory, obtain monthly refunds.

For domestic supplies, taxpayers will be required to file VAT returns

For imports, VAT will be payable to customs at the time of import.

Where the taxpayer’s input VAT for the month exceeds its output VAT, the business will have to carry the excess forward for three months. The business can then apply for a refund from the GDT.

Detailed rules exist in regard to specific invoicing and record keeping obligations. Invoices vary according to whether a VAT registered or non-registered person is being invoiced.

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