Cambodia: Guidance on income tax incentives for expanded qualified investment projects
The new guidance imposes stricter criteria when computing the EQIP exemption rate.
The new guidance imposes stricter criteria when computing the EQIP exemption rate.
The Ministry of Economy and Finance (MoEF) issued Prakas No. 313 MEF.Prk.GDT (dated May 10, 2024) providing guidance on the income tax incentives for expanded qualified investment projects (EQIPs).
KPMG observation
One of the notable changes under the guidance is the commencement date of the EQIP incentives. Previously, the additional tax exemption period granted for EQIPs commenced from the date of approval for the EQIP by the Council for the Development of Cambodia (CDC), which was a challenge for EQIPs that needed a significant amount of lead time in procuring, installing, and commissioning key equipment and facilities for the EQIP activities before generating any income. Under the new rule, EQIPs are now able to maximize the available incentives because the EQIP incentive period now begins once the EQIP starts to generate its own income.
However, the new guidance imposes stricter criteria when computing the EQIP exemption rate in that it requires EQIPs to keep track of the actual capital injected into the EQIP activities, as opposed to using the ballpark figure of projected capital submitted to the CDC during EQIP application.
Read a June 2024 report 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.