Cambodia Cross-Border Tax Guide 2026

Overview — Cross-Border Taxation

Cross-border taxation in Cambodia is governed by the Law on Taxation (LoT), Prakas on international tax matters, and Cambodia's network of Double Tax Treaties (DTTs). Cambodia follows a territorial tax system, meaning only income sourced in Cambodia is subject to Cambodian tax. Payments to non-residents are generally subject to withholding tax (WHT) at source, with rates potentially reduced under applicable DTTs. The GDT has strengthened its international tax compliance capabilities, including transfer pricing audits, exchange of information, and permanent establishment determinations.

Withholding Tax Rates

Payments to non-residents are subject to withholding tax at the following standard rates:

• Dividends: 0% (no WHT on dividends paid to residents or non-residents)
• Interest: 15% (0% for bank interest; 15% for other interest to non-residents, subject to DTT)
• Royalties: 15% (on licensing fees, patents, trademarks, copyrights)
• Services: 14% for management/technical services (or 10–15% depending on classification)
• Branch remittances: 14% on after-tax profits remitted by a branch to its head office
• Rental income: 10% on rental payments to non-residents

These rates may be reduced under applicable DTTs. The Cambodian payer must withhold and remit the tax within 15 days of the payment date.

Double Tax Treaties (DTTs)

Cambodia has signed and ratified over 10 double tax treaties, generally following the OECD Model Convention. Key treaties:

• ASEAN: Singapore, Thailand, Vietnam, Laos, Myanmar, Brunei, Philippines, Indonesia
• East Asia: China, South Korea
• Other: Treaties with additional countries are under negotiation

DTTs typically reduce WHT rates on interest to 10%, royalties to 10%, and provide a 0% rate on dividends for qualifying shareholders. They also provide for the elimination of double taxation through foreign tax credit or exemption methods, and include mutual agreement procedures for dispute resolution.

Transfer Pricing

Cambodia introduced formal transfer pricing rules under Prakas 1091 (2020) and subsequent regulations, aligned with OECD Transfer Pricing Guidelines. Requirements:

• Arm's length principle: All related-party transactions must be at arm's length
• Documentation: Taxpayers must prepare contemporaneous transfer pricing documentation
• Related parties: Includes direct and indirect control, management influence, and family relationships
• TP return: Annual transfer pricing declaration must be filed with the CIT return
• Penalties: Adjustments can result in additional tax of 20% plus penalties and interest

Thin capitalisation rules limit interest deductions to 130% of EBITDA. Advance Pricing Agreements (APAs) are available for taxpayers seeking certainty on transfer pricing matters.

Permanent Establishment (PE)

A foreign company with a Permanent Establishment (PE) in Cambodia is subject to Cambodian CIT at 20% on profits attributable to the PE. A PE is created if the foreign company has:

• A fixed place of business in Cambodia (office, branch, factory, workshop, construction site)
• A dependent agent with authority to conclude contracts in Cambodia
• Service presence exceeding 90 days in a 12-month period

Foreign companies with a PE must register with GDT, obtain a tax patent, and file CIT returns. Without a PE, foreign companies are subject only to final withholding tax on Cambodian-source income.

FAQs

How can I claim treaty benefits in Cambodia?

To claim reduced WHT rates under a DTT, the non-resident recipient must provide a Certificate of Tax Residency (issued by their home country tax authority) and complete a treaty relief application with the GDT.

Are management fees subject to WHT?

Yes, management and technical service fees paid to non-residents are subject to 14% WHT. This rate may be reduced under an applicable DTT if the services do not create a PE.

What is the penalty for non-compliance with transfer pricing rules?

Failure to maintain proper TP documentation can result in penalties of up to KHR 10 million. TP adjustments may result in additional tax of 20% on the adjustment amount, plus late payment interest.

Does Cambodia have exchange of information agreements?

Yes, Cambodia has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC) and exchanges information with treaty partners under DTTs and the Common Reporting Standard (CRS).

Disclaimer

This guide provides general information about Cambodian cross-border taxation for the 2026 tax year. Tax laws and treaties may change. Always consult with a qualified Cambodian tax advisor or the General Department of Taxation for advice specific to your situation. InvestmentKit does not provide tax advice.