Cambodia changes tax rules for commercial gambling businesses

There will be a five-year transition period from 2023 onward.
There will be a five-year transition period from 2023 onward.

The Cambodia Ministry of Economy and Finance (MEF) has started to implement a new taxation regime on commercial gambling venues. 

Cambodia.- The revenue-based taxation rules and procedures on commercial gambling businesses on the self-declaration regime have been implemented by the Cambodia Ministry of Economy and Finance (MEF) on December 30, 2022. For several decades, the taxation method was sum-based.

Gambling establishments are also required to follow the International Financial Reporting Standards, governing how certain types of transactions and events are reported.

The secretary of state of the nation’s Ministry of Economy and Finance, Mey Vann, told the Khmer Times that the move “means that there would no longer be cases of hiding cash to be paid to the authority even by casino owners and tax officials as the rules and procedures determine check-and-balance practices for the balanced power among operators, regulators, inspectors and other relevant stakeholders involved in the implementation of the new proclamation.”

The official also noted that “check-and-balance practices mean all relevant parties are required to check or examine one another. None of them can exploit anything in the gambling business operations, while the casino party would not be able to cheat the gamblers and the gamblers would not be able to cheat the casino. Gamblers at casinos can file complaints if they have sufficient evidence.”

Vann, who is also a member of the General Secretariat of the Commercial Gambling Management Commission of Cambodia (CGMC) of MEF, added the new rules and procedures would allow people to enjoy commercial gambling in casinos that are considered entertainment centres.

However, he said that after the five-year transition period from 2023 onward, the government would require casinos to change the word on the signboard to commercial gambling.

“We cannot ask them to change immediately and so we have to give them some time and they are related to many factors such as their internal agreements and other legal aspects,” said Vann, adding that lump sum-based taxation method had been practised since the1990s.

Khun Darith, Managing Partner of audit, accounting and tax solutions at accountancy and auditing firm K Professional Accountants (KPA), told Khmer Times that “the new guidelines and procedures to implement tax obligations to commercial gambling industry are divided into two folds that would enable GDT to properly regulate the gambling industry which strengthens the tax regime and to collect tax timely — monthly and annually — from the industry.”

Darith also explained that commercial gambling entities will have profit tax obligations of 20 per cent and other withholding tax obligations and this is yet another indicator that GDT will be expecting to collect more taxes from the commercial gambling industry.

See also: Cambodia: 606 arrests since September in illegal gambling crackdown

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