Tax Update: Instruction on Administrative Measures for Failure to Implement the Second Notification Letter Regarding Inaccurate Tax Return

On 22 August 2025, the General Department of Taxation (“GDT”) under the Ministry of Economy and Finance (“MEF”) issued Instruction No. 26439 GDT Instruction on Administrative Measures for Failure to Implement with the Second Notification Letter Regarding Inaccurate Tax Return.

Background:

Under the 7th legislature of the National Assembly and the Royal Government led by Prime Minister, Samdach Moha Borvor Thipadei HUN MANET, the overall government approach is to foster a business-friendly environment. In line with this, the General Department of Taxation (“GDT”) has transitioned from heavy reliance on frequent tax audits to a more streamlined system emphasizing enhanced cross-checking of tax returns. Under the Standard Operating Procedures (“SOP”) for Tax Audit issued in April 2024, tax audits are now restricted to once every three years, unless specific irregularities are identified. Instead, the GDT verifies the accuracy of reported transactions using internal data management systems and cross-checking against third-party sources as outlined in Notification No. 9124 dated 21 March 2025. This framework reduces the audit burden on compliant taxpayers, facilitates early detection of issues through the e-filing system, and provides opportunities for timely corrections to minimize penalties.

Under Notification No. 9124, if irregularities are identified in tax return filings, the GDT will issue an official notification letter accompanied by a detailed annex outlining the identified issues, which will be delivered either directly to the taxpayer or via the GDT’s electronic system. Please read our full Article via this link.

However, some taxpayers fail to comply with Notification No. 9124. Under Instruction No. 26439, taxpayers who fail to make payment or do not respond within the stipulated period shall be subject to the following administrative measures imposed by the GDT:

1. Unpaid taxes, including administrative penalties outlined in the second notification letter, will be officially recorded as tax debt and processed under Prakas No. 962 MEF.Prk (20 November 2020), with the taxpayer potentially subject to a tax audit.
2. In case evidence of tax evasion or risk of tax loss is identified, the GDT may suspend the taxpayer’s VAT certificate or apply other enforcement measures in accordance with tax laws and regulations.

This Instruction underscores the GDT’s commitment to transparency and voluntary compliance while strengthening enforcement for non-compliance. Businesses should review their tax filings proactively to mitigate risks.