Cambodia: Cambodian Withholding Taxes

Last Updated: 24 December 2008
Article by Edwin Vanderbruggen

Cambodian tax law provides a withholding tax ("WHT") system for many types of income including services, rent, interest, royalties and dividends. The applicable rate depends on whether the recipient of the income is a resident or not. In this article, the WHT regime of Cambodia is examined with particular attention for those situations which create the most practical difficulties.

There are widespread misunderstandings about WHT because many fail to recognize that WHT is just a collection system of tax due by the beneficiary of the service income, and not tax owed by the payer of the income. The payer ("withholding agent") remits the WHT directly to the Tax Department but it is in fact paid on behalf of the beneficiary of the income. The beneficiary of the income, the one that performed the service and is paid a fee, is the person that is taxable on that fee (the taxpayer). That tax is paid as a matter of responsibility of the payer of the income, which the payer remits to the Tax Department ("TD") on behalf of the taxpayer.

That is why the WHT must be grossed -up when the beneficiary charges a fee "net of withholding tax". That just means that the beneficiary expects the payer to bear the cost of the tax which is actually tax owed on the income by the beneficiary. So, the income of the beneficiary is actually the fee paid in cash plus the tax which is paid to the Tax Department and which the payer also took care of. The law provides that the WHT applies to the entire income, also to income paid in kind. Income paid in kind can consist of supplying goods or services, or by paying a debt to a third party.

Applicable rates

The applicable WHT rates are represented in the following tables:

Payer Income Beneficiary Rate Note
Resident taxpayer carrying on a business performance of services resident physical person 15% Exemption confirmed if beneficiary is a real regime taxpayer
Resident taxpayer carrying on a business royalty for intangibles resident taxpayer 15% Exempt from WHT if this income is exempt income for a government institution and certain non -profit organizations
Resident taxpayer carrying on a business royalty for mineral resources resident taxpayer 15% Exempt from WHT if this income is exempt income for a government institution and certain non -profit organizations
Resident taxpayer carrying on a business rent of movables and immovable goods resident taxpayer 10% Exempt from WHT if this income is exempt income for a government institution and certain non -profit organizations
Resident taxpayer carrying on a business (except a domestic bank) interest resident taxpayer (except domestic bank) 15% Exempt from WHT if this income is exempt income for a government institution and certain non -profit organizations
Resident taxpayer carrying on a business interest domestic bank exempted  
Domestic bank interest on fixed term account resident taxpayer 6% Exempt from WHT if this income is exempt income for a government institution and certain non -profit organizations
Domestic bank interest on non - fixed term account resident taxpayer 4% Exempt from WHT if this income is exempt income for a government institution and certain non -profit organizations

Payer Income Beneficiary Rate Note
Resident taxpayer carrying on a business performance of management or technical services non -resident taxpayer 14%  
Resident taxpayer carrying on a business royalty for intangibles non -resident taxpayer 14%  
Resident taxpayer carrying on a business royalty for mineral resources non -resident taxpayer 14%  
Resident taxpayer carrying on a business rent of movables and immovable goods (including other income connected to use of property) non -resident taxpayer 14%  

Who must apply the WHT?

Not everybody that pays service income is obliged to withhold tax in accordance with Cambodian tax law. In 2003 the tax law was amended to specify that only "resident taxpayers that carry on a business" can be withholding agents. "To carry on a business" means having an economic activity which is aimed at deriving income. This includes mostly companies that are real regime taxpayers, and also applies to non -profit organizations that carry on a business or derive income that is not exempt from taxes.

Non-resident companies that do not have a branch or another type of permanent establishment in Cambodia are not withholding agents for the Cambodian WHT. So when they pay for services, there is no Cambodian WHT even if the services take place in Cambodia.

Domestic or Non-resident?

Under Cambodian tax law, income will have a different WHT treatment depending on the residence of the beneficiary. It is thus important to identify the situation correctly. Under Cambodian tax law, a physical person is a resident for tax purposes when that person has his place of living or his principal place of abode in Cambodia or when he stays in Cambodia for over 182 days in any 12 month period. Companies are resident when they are organized or managed or have their principal business in Cambodia. A permanent establishment in Cambodia of a non-resident is treated as a resident for its Cambodia - sourced income.

So, residence of the beneficiary needs to be verified to apply the correct rate. Usually that does not present many practical problems, but questions may arise on the timing. When must the criteria of residence be verified: at the time of signing the service contract, at the time of invoicing the fee or at the time of the payment? The law and regulations are silent on this issue but it is likely that the moment of paying the fee counts in this regard. Thus, when a foreign expert who receives a monthly fee from a Cambodian company moves to live here, the domestic WHT shall apply to all payments that take place after his immigration.

The temptation may exist to have local persons act as nominees or pure intermediaries for payments that would otherwise be subject to WHT. That is notably the case with income which is exempt from WHT when paid to a local person, such as dividends and services fees (subject to conditions).

Take the following example:

A foreign company A supplies its Cambodian customer B with a service. The contract is signed by A and the services are performed by A. When the time to pay has come, A discovers that B must apply a 14% WHT because B is paying a service fee to nonresident company A. To avoid this, A assigns B to remit payment to C instead, which is a Cambodian company related to A. C issues the invoice and B does not apply the WHT. In this example, the TD is likely to argue that the exemption for Cambodian WHT should in fact not have been applied. A is and remains the taxpayer of the service fee because it is A who is entitled to the income. The interposition by C for collection purposes only (on A's behalf) does not change the fact that the taxpayer is a non -resident and thus that the domestic exemption does not apply.

Which service income is subject to tax?

The domestic WHT spells out that all "income from the performance of services" is subject to the tax. The Prakas TOP further provides that any income from economic activity besides sale of goods, rent and employment is in fact "income from the performance of services" and thus subject to WHT. This last definition is in any event incomplete. From the other articles of the LOT it is clear that interest, dividend and royalties are not treated as income from services for WHT purposes.

In the non-resident WHT, not all services are subject to the WHT. Only the income remunerated for "management or technical services". However, there is no definition of this category in the laws or regulations. It is safe to assume that the Tax Department normally gives a wide interpretation to what is a "management or technical service". Consequently, taking the position that the service you pay is not a "management or technical service" may easily trigger a challenge.

The place where services take place does not matter under the domestic or the nonresident WHT. When a Cambodian company pays for services that are carried out abroad, the non-resident WHT applies nevertheless.

When is the withholding tax due?

Under Cambodian tax law, WHT becomes due if and when the payer remits the payment to the beneficiary. At the latest at the 15th of the month following the month in which was paid, the tax return must be made and the tax paid.

If payment of the income does not take place, the duty to withhold the tax does not (yet) exist. However, there is one exception. Even if payment does not occur, the withholding agent must apply the tax if and when the income is included in the expenses of the company. So, an unpaid income that was deducted already by the company which is supposed to pay it will be subject to WHT anyway.

Exemption for domestic WT on service fees paid to real regime taxpayers

Under Cambodian tax law, the domestic WHT only applies on service fees paid to resident physical persons. This is confirmed in the Prakas TOP, where an exemption is provided for WHT on service fees (not on other income!) if the beneficiary is a resident real regime taxpayer and if the fee features in a VAT invoice which has all information as required by the relevant regulations. That is why, in most cases, Cambodian companies that pay service fees to each other do so without WHT, but with VAT.

Payment of rent and lease fees

A Cambodian company ("the lessee") must apply a 10% WHT when paying rent of movable or immovable goods to a resident company or physical person ("the lessor").

This applies for ex ample to office rent and leasing of land and buildings. If the lessor is a company that is subject to the real regime of taxation, the lessor may use the WHT which was paid by the lessee on his behalf to the Treasury as a credit for its own Tax on Profit liability. Rent, lease or finance lease allowances paid for the use or the right to use movable goods such as vehicles and equipment are also subject to a 10% WHT when paid to any Cambodian company, and to 14% when paid to a non-resident recipient.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.