On August 22, 2024, the General Department of Taxation (GDT) issued a response letter to the request submitted by the Association of Banks in Cambodia and the Cambodia Microfinance Association concerning the VAT reverse charge exemption on specific e-commerce financial services. The exempted services include:
- Education and training expenses, including e-learning materials.
- Overseas legal services.
- Independent director fees.
- Risk assessment services by agencies like MOODY’s, S&P, and FITCH.
- Monthly fees related to payment transactions from foreign correspondent banks.
- Overseas money transfer fees.
- Expenses for obtaining overseas loans, including interest and service fees.
- Money transfer services via SWIFT or BOTTOMLINE (excluding annual fees for system usage), etc.
This is a positive move by the government to limit the overly broad scope of the VAT reverse charge applicable to e-commerce transactions for taxpayers in the financial industry during this tough period, as they engage in VAT-exempt business activities, and cannot claim deductible VAT inputs.
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