CAMBODIA has introduced new rules and procedures governing value-added tax (VAT) on goods and services provided via e-commerce for non-residents.
Its Ministry of Economy and Finance issued the new rules earlier this month and they primarily target e-commerce transactions between Cambodian taxpaying consumers and non-resident sellers active in Cambodian territory but do not have permanent presence in the country.
According to a Phnom Penh Post report, the new rules say that the taxable value is the transaction value, and any form of compensation arrangement other than cash shall also be included in the value, based on market rates.
Tax authorities can also determine the taxable amount if they are not satisfied with the declared amount by the companies.
The new rules complement an earlier law that regulates VAT on electronically supplied goods and services, and is designed in accordance with the E-Commerce Law, which came into force in November 2019.
The government had recently launched a 15-year policy framework for the country’s evolving digital sector and it paves the way for a thriving digital economy, as a new engine of economic growth.
Minister Aun Pornmoniroth said the Cambodia Digital Economy and Social Policy Framework 2021-2035 sets out a vision of building a vibrant digital economy and society to foster new economic growth and promote social welfare based on the normalisation of the ‘new normal’.
The vision includes the three principles of building a digital foundation, digital capture and digital transformation.
This is also expected to drive the post Covid-19 economic recovery plan for the country.
Meanwhile, the Khmer Times reports that the Ministry of Commerce has called on all foreign enterprises, individuals, legal entities and branches of foreign companies involved in e-commerce to apply for e-commerce licenses before Dec 1.
It said that despite organising outreach programmes, the response has been poor and many companies were yet to apply for their licenses.
The Ministry had been stressing that starting from Dec 1, the sole proprietorship, legal entity and branch of foreign companies that conduct e-commerce business in Cambodia without a license, will face fines.
Their businesses can also be closed down or they may face other penalties.
It said companies can apply for their business licenses through the electronic system.