Cambodia adds VAT to E-Commerce Transactions


The Cambodian government has announced that with the introduction of Sub-decree No. 65 S.E on the Implementation of Valued Added Tax on E-Commerce (“Sub-decree 65”) – VAT will be added to digital product and service E-commerce transactions.

Sub-decree 65 defines E-Commerce as the activities of purchasing, selling, leasing, or exchanging products or services, including electronic commercial and civil commercial activities.

According to the Khmer Times, the Ministry of Posts and Telecommunications said it aims to “collect tax on such services provided by firms that generate revenue from Cambodians but are not registered in the Kingdom” which include companies such as Netflix, Amazon, Alibaba, Facebook and Google.

What does Sub-decree 65 mean?

DFLD said that with Sub-decree 65, signed on the 8th April 2021, “Cambodia has joined other countries in the region such as Thailand, Malaysia, Singapore, Indonesia, the Philippines and Vietnam in drafting and implementing new rules pertaining to e-commerce sales to Cambodian consumers by non-resident entities which are in accordance with OECE recommendations.

Non-residents entities, without a permanent office in Cambodia, who provide e-commerce goods or services to Cambodian consumers must register with the Cambodian tax authority if their revenue thresholds meet the requirements.

These apply to both B2C (Business to Consumer) and B2B (Business to Business) transactions.

Non-compliance or obstruction of the tax law is liable to a fine ranging from 5 million Khmer riel (approximately USD $1,250) to 10 million Khmer riel (approximately USD $2,500) and/or to imprisonment from 1 month to 1 year.


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