One of the most consistently challenging aspects of contracting in Cambodia is complying with the country’s tax system. As well as paying tax in Cambodia, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
If you’re working in Cambodia under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Cambodia for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Cambodia, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Cambodia through PAYE is left with the prospect doing everything themselves.
Do you know much about Cambodian Tax Law? Does Cambodia have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Cambodia can range from 0 to 20 percent, and you need to be sure you are placed in the correct tax brackets.
If you are a contractor and want a calculation on your tax and net retention in Cambodia, we can supply it to you free of charge.
Contractors in Cambodia are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Cambodian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Cambodian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Cambodian tax office or tax department directly including processing your tax refund if you are eligible.
We work with numerous umbrella companies in Cambodia, many of whom are experts in tax and immigration laws. If you have any questions about tax in Cambodia, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Cambodian work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Cambodia but without the overhead of directly dealing with the Cambodian tax authorities. Get in touch with us today for some reliable advice on tax in Cambodia!
Employment income tax in Cambodia is withheld and paid by the employer on a monthly basis. Individuals receiving employment income only are not required to submit annual personal income tax returns to the General Department of Taxation as the monthly tax withheld is considered final.
Step 1: Register
Register here on the General Department of Taxation website for e-Services including the online filing and payment of taxes.
Step 2: File Taxes
Once you have registered, you can file taxes here.
The website for the Taxation Department’s e-Services may be difficult to access. Downloading the relevant forms is a more reliable alternative. These can be found here. It is recommended that you consult a tax specialist and/or translator.
The above tax rates refer to monthly employment income.
Non-residents: Non-residents are taxed at a flat rate of 20%.
Tax Reliefs: Resident individuals may be given a tax relief of KHR75,000 per child under 14 years old or up to 25 years old if still at school, and per unemployed dependent spouse.
You become a tax resident in Cambodia when:
- You are domiciled in Cambodia;
- You have a principal place of abode in Cambodia; or
You are present in Cambodia for 183 days or more during the income tax year.
Residents are taxed on their worldwide income. Non-residents are taxed on their Cambodia-sourced income only.