Cambodia: Clarification of rules regarding when withholding tax is due

Instruction No. 12350 GDT (dated 20 April 2023)

Instruction No. 12350 GDT (dated 20 April 2023)

The General Department of Taxation (GDT) issued guidance—Instruction No. 12350 GDT (dated 20 April 2023)—to clarify the rules regarding the timing of the imposition of withholding tax on various transactions.

  •  Withholding tax is due at the time when the payment is made or recorded in the accounting book. Therefore, in accordance with the Cambodian International Financial Reporting Standard (CIFRS), the taxpayer must record the accrual expenses from economic activities every month, regardless of the payment status.  
  • As for expenses that are subjected to withholding tax, taxpayers have the obligation to withhold and pay withholding tax to the tax administration every month in accordance with the relevant tax laws and provisions in force.

KPMG observation

This guidance stems from the GDT’s observation that some enterprises may have misinterpreted the withholding tax rules and only declare the applicable withholding tax at the time of payment, instead of declaring the withholding tax at the time of accrual, which is to be recorded on a regular basis in accordance with the CIFRS.

However, depending on the nature of the transaction and the arrangement between the parties involved, the accrual of the expense may only be reasonably recorded at a particular time (i.e., not necessarily monthly). This applies, for example, to transactions that are billable based on completion of specific milestones, or if the basis of the accrual can only reasonably be determined on a quarterly or semi-annual basis. This matter requires further clarification from the GDT as Instruction No. 12350 GDT may be interpreted that taxpayers are required to record accrued expense on a monthly basis.

Read an April 2023 report [PDF 112 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.