Digital Goods and Services: VAT Regulations

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Who are considered non-resident taxpayers under Sub-Decree 65 and Prakas 542?

Taxpayers with permanent establishments in Cambodia

Local suppliers of digital services

Residents who purchase e-commerce services

Suppliers of digital goods and services without a permanent establishment in Cambodia (correct)

What is the VAT rate charged on digital goods supplied by non-resident suppliers in Cambodia?

10% (correct)

20%

15%

What defines a digital good?

Services that can only be provided in person

Intangible goods ordered and supplied entirely through an electronic system (correct)

Goods delivered physically via traditional methods

Material goods that require face-to-face transactions

Which of the following best describes e-commerce according to Sub-Decree 65?

Commercial activities involving goods or services transacted via an electronic system Signup and view all the answers

What is the primary objective of introducing VAT on e-commerce in Cambodia?

To collect VAT from consumers purchasing from non-resident suppliers Signup and view all the answers

What characterizes a digital service?

A service transacted through an electronic system Signup and view all the answers

Who is categorized as a self-assessment taxpayer according to the regulations?

Tax registered customers receiving supplies from non-resident taxpayers Signup and view all the answers

In which year was the current VAT in Cambodia introduced?

1999 Signup and view all the answers

What document is necessary for trucks that change the total load weight to update their information?

Application Letter to GDT Signup and view all the answers

When is the annual tax period to collect tax on means of transportation?

June 1 to November 30 Signup and view all the answers

What is the penalty for delayed payment of the tax on means of transportation?

100% of the tax payable Signup and view all the answers

Are vehicles with the license plate ខ.ម. or ន.ប. required to pay tax on means of transportation?

No, they are exempt if certified by specific ministries Signup and view all the answers

Is a car purchase in December 2019 subject to paying tax for the year 2019?

No, if the Vehicle Registration Card is obtained in December 2019 Signup and view all the answers

Which type of ambulance is exempt from tax on means of transportation?

State-owned ambulances Signup and view all the answers

What must the relevant Ministry do to obtain a road tax sticker?

Provide a vehicle inventory to GDT Signup and view all the answers

What happens if a vehicle owner does not pay their taxes by January 1 of the following year?

They will be fined by GDT Signup and view all the answers

Which of the following is NOT an example of an e-commerce activity?

Selling physical storefront leases Signup and view all the answers

What determines that a digital service is rendered in Cambodia?

Payment and residence information Signup and view all the answers

Which of the following tax rates applies to all types of wine products?

35% Signup and view all the answers

What is a non-resident taxpayer required to do to be considered a taxable person under Prakas No. 542 MEF.PK?

Supply digital goods or services with turnover above the set threshold Signup and view all the answers

Which of the following is NOT a required document for newly registered vehicles?

Application for exemption from tax Signup and view all the answers

When did the VAT on e-commerce activities come into effect?

1 April 2022 Signup and view all the answers

Which of the following describes an electronic platform operator?

A non-resident supplying digital goods through electronic means Signup and view all the answers

What is the specific tax rate on domestic and international air tickets?

10% Signup and view all the answers

Which of these is a digital product that can be ordered and downloaded?

Music files Signup and view all the answers

What is required for vehicles without a Vehicle Tax ID card?

Submission of multiple tax-related documents Signup and view all the answers

Which activity is classified as 'Application hosting-bundle contracts'?

Hosting multiple applications under a single contract Signup and view all the answers

What is included in the documentation for paying tax on means of transportation?

Vehicle Registration Card Signup and view all the answers

What tax rate applies to leisure and entertainment services?

10% Signup and view all the answers

Which of the following is a characteristic of a taxable person under Prakas No. 542 MEF.PK?

May be a self-assessment taxpayer receiving digital goods Signup and view all the answers

Study Notes

Sub-Decree 65 and Prakas 542 (Digital Goods and Services)

Sub-Decree 65 and Prakas 542 govern the supply of digital goods/services via e-commerce platforms by non-resident suppliers to Cambodian residents.
Taxpayers affected include:
- Non-resident suppliers (no permanent establishment in Cambodia) supplying digital goods/services/e-commerce to Cambodian customers.
- Cambodian self-assessment taxpayers receiving such supplies.
Electronic platform operators (non-resident) involved in facilitating these transactions are also covered.

Value Added Tax (VAT) on E-commerce

VAT on e-commerce is introduced to ensure fairness between local and non-resident suppliers.
The existing 10% VAT on goods/services from local suppliers is extended to non-resident suppliers' transactions.
This applies to digital goods and services supplied electronically.

Definitions

Digital Goods: Intangible goods wholly transacted digitally.
Digital Services: Services conducted via electronic systems.
E-commerce: Buying/selling/renting/exchanging goods/services electronically, encompassing business and civil activities (as detailed in Sub-Decree 65 annex).

E-commerce Examples

Broad range of activities, including ordering tangible/digital goods, purchasing digital content, software licenses, streaming services, website hosting, and online services.

Electronic Platform Operators

Non-resident companies delivering digital goods/services through e-platforms on behalf of other non-resident suppliers.

Determining Transaction Location (Cambodia)

Indicators include payment, residence, and access information (credit card, address, IP address).

Effective Dates

Prakas 542 is effective from April 1, 2022 (Notification No. 776).

Taxable Persons (Prakas 542)

Non-resident suppliers(including electronic platform operators) with turnover exceeding 250 million Riels annually or anticipated 3-month consecutive turnover of 60 million Riels.. or more within the fiscal year.
Cambodian self-assessment taxpayers receiving digital goods/services/e-commerce from non-resident suppliers.

Specific Taxes on Goods and Services

Various specific taxes apply to certain goods/services such as alcoholic beverages, cigarettes, air tickets, telecommunication services and leisure/entertainment services.

Vehicle Tax (Transportation)

Required Documents (Vehicle Tax ID Card): no documents are required.
Required Documents (No Vehicle Tax ID Card): Copies of tax return form (FORM VT 001), relevant documents from previous year, notice of lost vehicle registration.
Newly Registered Vehicles: copies of ID, vehicle registration card or import tax receipt, vehicle use certificate, vehicle technical inspection certificate (for trucks, vans, and buses)
Car Updates: copies of new owner's ID, registration card(s), previous tax payment verification documents.
Changes to Truck Load Weight: Application letter to GDT, attaching registration card, ID, and vehicle inspection certificates (both old and updated).

Annual Tax Period and Penalties

Annual tax payment period: June 1st to November 30th.
Penalty for late payment: 100% of the tax amount (e.g., 200,000 Riel owed becomes 400,000 Riel).

Exemptions from Vehicle Tax

Vehicles with license plates ខ.ម. or ន. ប. officially registered by the defense or interior ministries are exempt.

Other Tax Considerations

Cars purchased in December 2019: Payment for 2019 is possible if a registration card or import tax receipt exists; otherwise, payment for the following year is permitted.
State-owned ambulances and fire trucks are exempt; private hospital ambulances are subject to the tax.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz focuses on Sub-Decree 65 and Prakas 542 governing digital goods and services in Cambodia, particularly how these regulations impact non-resident suppliers and local taxpayers. It also explores the implications of Value Added Tax (VAT) on e-commerce transactions to promote fairness in digital marketplaces.