Introduction to Cambodian Tax System Quiz

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Questions and Answers

What is the annual turnover range for a medium taxpayer in the agricultural sector?

Above KHR 4,000M

KHR 1,000M to KHR 6,000M

KHR 1,600M to KHR 8,000M

KHR 1,000M to KHR 4,000M (correct)

What is the asset value range for a medium taxpayer in the industrial sector?

KHR 2,000M to KHR 4,000M (correct)

No asset value range is provided for medium taxpayers in the industrial sector

Above KHR 4,000M

KHR 1,000M to KHR 2,000M

Which of the following is not considered a medium taxpayer according to the text?

Sole proprietorship with annual turnover from KHR 1,000M to KHR 6,000M

Partnership with annual turnover from KHR 1,600M to KHR 8,000M

National government institution (correct)

Legal entity with annual turnover from KHR 1,000M to KHR 4,000M

What is the annual turnover range for a large taxpayer in the service and commercial sectors?

Above KHR 6,000M Signup and view all the answers

Which of the following is considered a medium taxpayer according to the text?

A foreign embassy Signup and view all the answers

What is the asset value range for a large taxpayer in the industrial sector?

No asset value range is provided for large taxpayers in the industrial sector Signup and view all the answers

Which of the following is NOT one of the purposes of tax revenue?

Funding private businesses Signup and view all the answers

What is the highest level of tax regulation in Cambodia?

Cambodian Tax Law passed by the National Assembly Signup and view all the answers

Which department was responsible for taxation in Cambodia from 1979 to 1990?

Department of Industrial Tax Signup and view all the answers

What is the difference between direct and indirect taxes?

Direct taxes are collected at the source, indirect taxes are added to the cost of goods and services Signup and view all the answers

Which department is responsible for collecting customs and excise duties in Cambodia?

General Department of Custom and Excise (GDCE) Signup and view all the answers

When was the General Department of Taxation (GDT) established?

2008 Signup and view all the answers

Which type of entities fall under the category of Large Taxpayers?

Sole proprietorships, partnerships, and legal entities with assets above KHR2,000M Signup and view all the answers

What is the key characteristic of Self-Assessment Taxpayers?

They determine/calculate tax payable and file tax returns independently Signup and view all the answers

What is the asset threshold for industrial taxpayers to be considered as Large Taxpayers?

Above KHR4,000M Signup and view all the answers

What is the responsibility of taxpayers classified as Self-Assessment Taxpayers?

Determine/calculate tax payable and file returns independently Signup and view all the answers

Which entities are exempted from being Large Taxpayers in the agricultural sector?

Sole proprietorships with assets below KHR2,000M Signup and view all the answers

What is the tax called when it applies to income earned?

Pay Income Tax Signup and view all the answers

Which tax is imposed on the rental of immovable property?

Immovable Property Rental Tax Signup and view all the answers

How often is the Unused Land Tax levied?

Annually Signup and view all the answers

What is the purpose of the Withholding Tax?

To collect tax in advance on certain types of income Signup and view all the answers

When is the Transfer Tax due?

Upon transfer of immovable property ownership Signup and view all the answers

What is the purpose of the Prepayment of Tax on Income?

To collect tax in advance on expected income Signup and view all the answers

What is the main difference between tax avoidance and tax evasion?

Tax avoidance is when taxes are reduced through legal means, while tax evasion is the willful violation of tax laws. Signup and view all the answers

Which of the following is an example of an indirect tax?

VAT (Value Added Tax) Signup and view all the answers

What is the definition of tax avoidance according to the OECD?

The arrangement of a taxpayer's affairs that is intended to reduce his/her tax liability. Signup and view all the answers

Which of the following is an example of a direct tax?

Income Tax Signup and view all the answers

What is the definition of tax evasion according to Article 226 of the Law of Taxation (LOT)?

The willful, knowing, or systematic and repeated violation of tax provisions with the intention of reducing or eliminating the tax amount required by tax provisions to be paid. Signup and view all the answers

Which of the following is an example of a tax that is considered an indirect tax?

Accommodation Tax Signup and view all the answers

Study Notes

Background of GDT

The Department of Taxation was created in 1953
The taxation system was destroyed from 1975-1979
The Department of Industrial Tax was established from 1979-1990
The Department of Taxation was re-established from 1990-2008
The General Department of Taxation (GDT) was established in 2008

Definition of Tax

Tax is the obligation of citizens to the government for public service expenses
Taxes are compulsory contributions to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions

Purpose of Tax

Tax revenues are used for building hospitals, schools, roads, bridges, and paying salaries for soldiers, armed forces, and civil servants
Tax revenues are also used for general expenditures, social affairs, economics, and development
Tax revenues are used for defending borders and heritages

Tax Regulations

Cambodian Tax Law (National Assembly)
Royal-Decree (King)
Sub-decree (Prime Minister)
Prakas, Circular and Notification (Ministry of Economy and Finance)
Circular and Notification (General Department of Taxation)

Tax Collection

General Department of Taxation (GDT)
General Department of Custom and Excise (GDCE)

Direct and Indirect Taxes

Direct taxes: collected directly from physical or legal persons
Indirect taxes: imposed on consumers of goods and services

Medium Taxpayers

Annual turnover from KHR 1,000M to KHR 4,000M for taxpayers in the agricultural sector
Annual turnover from KHR 1,000M to KHR 6,000M for taxpayers in the service and commercial sectors
Annual turnover from KHR 1,600M to KHR 8,000M in the industrial sector
Assets valued at KHR 1,000M to KHR 2,000M for taxpayers in the agricultural, services and commercial sectors
Assets valued at KHR 2,000M to KHR 4,000M in the industrial sector
National and sub-national government institutions, associations or non-governmental organizations, or projects under these institutions
Foreign embassies and consulates, international organizations and technical cooperation agencies of other countries

Large Taxpayers

Annual turnover above KHR 4,000M for taxpayers in the agricultural sector
Annual turnover KHR 6,000M for taxpayers in the service and commercial sectors
Annual turnover above KHR 8,000M in the industrial sector
Branches of foreign companies
Subsidiary of multinational companies
Enterprises registered as Qualified Investment Projects (QIP)
Assets valued above KHR2,000M for taxpayers in the agricultural, services and commercial sectors
Assets valued above KHR 4,000M for industrial

Self-Assessment Taxpayers

Taxpayers bear their own responsibility to comply with tax laws and regulations
Taxpayers have obligations to determine/calculate tax payable and fill the tax returns by themselves
Taxpayers must file tax returns and pay the taxes to tax administration by themselves by the due date stipulated in the law on taxation
It is subject to Tax Audit

Current Tax In Cambodia

Pay As You Earn (PAYE) Income Tax
Capital Gain Tax
Immovable Property Tax
Public Lighting Tax
Means of Transportation Tax
Accommodation Tax
Unused Land Tax
Value Added Tax (VAT)
Withholding Tax
Salary Tax
Immovable Property Rental Tax
Transfer Tax
Patent Tax

Tax Avoidance and Tax Evasion

Tax Avoidance: reducing the amount of tax that is payable by means that are within the law
Tax Evasion: the willful, knowing, or systematic and repeated violation of tax provisions with the intention of reducing or eliminating the tax amount required by tax provisions to be paid

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Description

Test your knowledge on the background of GDT, tax definitions, purposes, regulations, collections, avoidance, evasion, tax regimes, types of taxes, and tax payment in Cambodia.