Cambodia: Taxable salary thresholds; extension of certain tax benefit for textile and garment sector

New salary thresholds implemented for salary payable to resident employees from January 2023

New salary thresholds implemented for salary payable to resident employees

Effective from 1 January 2023 onwards, there will be new salary thresholds implemented for salary payable to resident employees from January 2023 for determining their taxable salary subject to tax on salary (ToS) at the progressive tax rate by tranche:


Threshold of taxable salary subject to ToS (Riel)

Tax rate

Tax relief (Riel)

Tax payable


From 0 to 1,500,000





From 1,500,001 to 2,000,000



[Taxable salary x 5%]- 75,000


From 2,000,001 to 8,500,000



[Taxable salary x 10%]- 175,000


From 8,500,001 to 12,500,000



[Taxable salary x 15%]- 600,000


over 12,500,000



[Taxable salary x 20%]- 1,225,000


For tax residents, the tax relief amounting to KHR150,000 per month for the spouse and for each dependent child will be deducted from the gross salary of the employee to arrive at the taxable salary base. In addition, the benefits (e.g., transportation, meal, social security / welfare fund, health insurance, baby care and indemnity / severance pay) provided to employees-workers for fulfilling works as per Circular no. 011 MEF, dated 6 October 2016, will also be deducted from the gross salary to arrive at the taxable salary base. 

KPMG observation

Note that as per the General Department of Taxation (GDT)’s practice, enterprises providing benefits as per Circular no. 011 must submit to the GDT a copy of their policy on such benefits for these to be eligible for such tax exemption. In this case, without such notification/approval from the GDT, there may be a risk that those benefits may be considered as part of taxable salary, which may not be deducted from the gross salary to arrive at the taxable salary threshold. Meanwhile, taxpayers must also keep sufficient supporting documents on the claiming of tax reliefs for the spouse and dependent child in case these are requested by the GDT during tax audit events.

Extension of the prepayment of tax on income (PTol) textile and garment sector

Prakas no. 002 further extends the 1% PToI suspension period for the textile and garment industry for another three years starting from 2023 to the end of 2025.

The suspension is applicable to qualified investment projects (QIPs) in the textile and garment industry, including enterprises producing textiles, garment, footwear, bag, handbag and hat for the purpose of export, whose income tax holiday period already expired.

Furthermore, qualified enterprises are required to comply with the following conditions:

  • Maintain proper accounting records as per the provisions of the law on taxation and the provision of the law on accounting which are in effect
  • Declare and pay all other tax obligations by the stipulated deadline
  • Provide the annual independent audit report to the GDT

The GDT has the right to invalidate this temporary suspension and impose other penalties if enterprises fail to comply with the above conditions. 

KPMG observation

The textile and garment industry is one of the pillar industries sustaining Cambodia’s economy. The extension of the 1% PToI suspension will provide some tax relief to this industry, whose operations were significantly affected by the global pandemic. Note that the PToI suspension is only applicable to QIPs in the sector, and subject to the three conditions, including:

  • Timely submission of proper tax declarations
  • Keeping of proper accounting records
  • Providing the annual independent audit report to the GDT

As it is, qualified enterprises must provide proper compliance with tax and regulatory obligations in Cambodia to benefit from the tax relief.

Read a January 2023 report [PDF 127 KB] prepared by the KPMG member firm in Cambodia


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.