(Prakas No. 172 MEF.Prk.GDT, dated 20 March 2024)
Effective from 1 January 2024, this Prakas by the MoEF clarifies the tax incentives provided to the education sector in Cambodia until the end of 2028. Below are the salient details of the Prakas:
Scope (Articles 2 and 3): This Parkas is applied to all public and private educational institutions that operate exclusively for education purposes in Cambodia (i.e., from kindergarten to higher education level), including technical and professional training institutions.
Tax incentives (Article 4): Educational institutions in Cambodia shall be exempt from the following taxes:
• Tax on Income (ToI)
• Prepayment of Tax on Income (PToI)
• Minimum Tax (MT)
• Obligation to withhold payments on services (i.e., management, consulting, and other similar services), interest, and dividends but shall be supported by sufficient supporting documents.
The supply of educational services and goods or other services for educational purposes (i.e., food and accommodation for students) shall be considered as nontaxable supplies. Meanwhile, the input tax on goods and services purchased by educational institutions for the purpose of supplying goods or services shall be noncreditable but allowed as deductible expenses.
Tax obligations of educational institutions (Article 5): To avail of the above incentives, educational institutions shall comply with the registration obligation, submit their annual and monthly tax declarations by stipulated deadlines, maintain proper accounting records, and submit the audited financial statement to the GDT where the annual turnover is above 4,000 million KHR (~USD1,000,000). Failure to comply with the above may lead to forfeiture of the tax incentives.
Non-exempted tax (Article 7): Educational institutions are still obligated to declare and pay the following:
• WHT on rental
• Tax on Salary (ToS)
• Immovable Property Tax
• Patent Tax
• Other taxes in accordance with the tax law and regulations in force.
Any provisions contrary to this Prakas shall be abrogated.
Source: KPMG
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