In January 2023, Cambodia enacted Changes to Tax on Income. In this article, you can find out a full list of the new income tax changes which came into effect in the first month of 2023.

What are the new Income Tax Changes in Cambodia?

On the 28th of September 2022, the Royal Government of Cambodia issued Sub-Decree No. 196 (“Sub-Decree 196”) which detailed an upcoming amendment to the Tables of Taxable Thresholds for Annual Tax on Income and Monthly Tax on Salary. This repeals the previous Sub-decree no. 09 dated 13 February 2020

The amendments to the progressive Annual Tax on Income and Monthly Tax on Salary tables under Sub-Decree 196 take effect from 1 January 2023.

Who do the changes to tax on income affect in Cambodia?

Sub-Decree 196 is designed to amend the annual progressive Tax on Income thresholds in relation to physical persons, sole proprietorships, and the distributive share of partners in a partnership (that are not classified as legal persons under the Law on Taxation). In other words, the new Sub-Decree establishes a new taxable rate for an individual, sole proprietorship, and distributive share income to the non-legal entity as well as the monthly tax on the salary of resident employees.

Sub-Decree 196 also amends the monthly Tax on Salary thresholds which apply to Cambodian resident employees.

Where can I find the full income tax rates following the new law change in Cambodia?

Below, you can find the respective changes to the annual progressive Tax on Income rates for taxpayers that are not considered legal persons and the monthly progressive Tax on Salary rates for tax-resident employees in Cambodia in the tables below.

What are the changes to the Annual Taxable Income in Cambodia?

According to Sub-decree 196 any taxpayer (non-legal entity), who has an annual income starting from above 18 million riels, shall be subject to the following tax rates:

1.) Tax on Income for Physical Persons, Sole Proprietorships, and Partnerships

Prior to January 2023

From 0 Riel to 16,000,000 Riels = 0% tax rate
From 16,000,001 Riels to 24,000,000 Riels = 5% tax rate
From 24,000,001 Riels to 102,000,000 Riels = 10% tax rate
From 102,000,001 Riels to 150,000,000 Riels = 15% tax rate
Great than 150,000,000 Riels = 20% tax rate

From January 1, annual taxable income will be the following:

From 0 Riel to 18,000,000 Riel = 0% tax rate
From 18,000,001 Riels to 24,000,000 Riels = 5% tax rate
From 24,000,001 Riels to 102,000,000 Riel = 10% tax rate
From 102,000,0001 Riel to 150,000,000 Riel = 15% tax rate
Greater than 150,000,000 Riel = 20% tax rate

2.) Monthly Tax on Salary for Tax Resident Employees in Cambodia

Prior to 1 January 2023

From 0 Riel to 1,300,000 Riels = 0% tax
From 1,300,001 Riels to 2,000,000 Riels = 5% tax rate
From 2,000,001 Riels to 8,500,000 Riels = 10% tax rate
From 8,500,001 Riels to 12,500,000 Riels = 15% tax rate
Greater than 12,500,000 Riels = 20% tax rate

From 1 January 2023

From 0 Riel to 1,500,000 Riel = 0% tax rate
From 1,500,001 Riels to 2,000,000 Riels = 5% tax rate
From 2,000,001 Riels to 8,500,000 Riels = 10% tax rate
From 8,500,001 Riels to 12,500,001 Riels = 15% tax rate
Greater than 12,500,000 Riels = 20% tax rate

What happens next after the income tax changes in Cambodia?

Following implementation, the GDT is likely to issue relevant regulations to provide further details on the changes to the tables. You can keep up to date with these regulations and all other business news via our social media and telegram channels or find out more about doing business in the Kingdom check out our free business resources or contact one of our team here.

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