Pursuant to the Law on Taxation 2023, the General Department of Taxation (“GDT”) under the Ministry of Economy and Finance (“MEF”) has issued Notification No. 9124 to inform taxpayers that, in cases where 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.
Required Actions Upon Receipt of a Notification Letter, Based on the Taxpayer’s Response:
| Response Scenario | Required Action |
| Agreement | Taxpayers are to settle the tax amount within 30 working days via a bank with an MoU with MEF or GDT e-Payment System.
Upon successful payment, the tax return will be automatically updated in the taxpayer’s e-Filing account. |
| Disagreement | The taxpayer shall submit a written protest with supporting documents via the GDT e-administration system or at the tax administration office.
This is to be submitted within 30 working days from the date of notification receipt. |
| No response from taxpayers | The GDT will issue a second notification letter. If no action is taken, the tax amount will be recorded as tax debt and may be subject to audit or enforcement measures.
Action will be taken in accordance with applicable tax laws and regulations. |
Therefore, the GDT kindly encourages all taxpayers to carefully review any notification received and to take appropriate action within the prescribed timeframe to ensure compliance and avoid penalties.
It is to be noted that the GDT previously relied heavily on tax audits to ensure taxpayer compliance with Cambodian tax laws and regulations. However, recognizing that frequent audits can be burdensome and may cause disruption to taxpayers, the GDT introduced a more streamlined approach by enhancing its crosscheck system. Under the Standard Operating Procedures (“SOP”) for Tax Audit issued in April 2024, tax audits are now limited to once every three years, whether limited or comprehensive, unless specific concerns or irregularities are identified. As a result of this new framework, the GDT is placing greater emphasis on verifying the accuracy of transactions reported in tax returns through its internal data management systems by cross-checking information against third-party sources such as banks, customs, and business partners, as outlined in Notification No. 9124. This approach not only reduces the audit burden on compliant taxpayers but also enables taxpayers to be alerted to the issues in their tax filings early on and places greater focus on the accuracy of transactions reported through the e-filing system. As a result, taxpayers have an opportunity to address discrepancies in a timely manner, which may help reduce the risk of incurring high administrative penalties during a formal tax audit.
This tax update is brought to you by Davies SM Attorneys-at-law.