September 2021 has seen the issuance of Circular 009 on the Usage of Khmer Language and Currency in Accounting Records and Financial Statements (“Circular 009”) and Notification No. 355 on Inspection Visits and Implementation of Interim Fines for Violations of Law on Accounting and Audit (“Notification 355”).

We set out the salient points in Circular 009 and Notification 355 below for your reference.

Circular 009 dated 1 September 2021

The 2016 Law on Accounting and Auditing (Royal Kram No. NS/RKM/0416/006 dated 11 Apr 2016) and Sub-decree 79 (ANKr.BK dated 1 June 2020) “Penalties for violations of the Law on Accounting and Auditing” respectively set out the obligations and penalties for entities with respect to maintaining accounting records and financial statements in Khmer language and currency.

Circular 009, which comes into effect from 1 January 2022, provides the following instructions:   

1. Enterprises or not-for-profit organizations (“NFPOs”) can use English language in their accounting systems and/or other related software to record accounting transactions in the event that enterprises or NFPOs are unable to procure accounting software that can support Khmer language. Approval is not required to use accounting software that cannot support the Khmer language however enterprises or NFPOs must formally notify the Accounting and Auditing Regulator (“ACAR”) clearly stating the current name and source of their chosen accounting software.
2. Internal accounting supporting documents need to be in Khmer language. English language documents may be used to support the Khmer versions. Accounting documents produced using English accounting software as stated in point 1 above and accounting documents prepared and provided by foreign business partners or organization partners, foreign fund providers or business administrations can be in English language. For supporting documents that are in a language aside from English or Khmer will need to be translated to Khmer or English and affixed with the seal of the enterprise. The responsibility to translate the supporting documents sits with the enterprise and/or NFPO. Example: A sale and purchase agreement which is a language aside from Khmer and English will need to be translated into English or Khmer with a signed acknowledgment by the enterprise owner or authorized representative and affixed with the enterprise or NFPO’s seal.
3. An Enterprise or NFPO can choose Khmer Riel (“KHR”) or another foreign currency as the functional currency in compliance with the Cambodian International Financial Reporting Standards (“CIFRS”) which apply to daily recording accounting transactions.
4. An Enterprise or NFPO must prepare its annual financial statements in Khmer language and denominated in KHR, or in dual currency (foreign currency and KHR), in compliance with CIFRS and the National Bank of Cambodia’s (“NBC”) exchange rate, respectively. These annual financial statements must be submitted to ACAR according to the guidelines on maintaining compliance with the Law on Accounting and Auditing and related subordinate legislation.
5. Enterprise which operates petroleum transactions within Cambodia territory must adhere to and implement Prakas 563 SHV.BrK dated 04 June 2018 on the Implementation of Tax Provisions for Petroleum Transactions.
6. During the implementation of this Circular, ACAR will monitor follow up and evaluate the capability, viability and levels of compliance in terms of ensuring that accounting records are maintained in Khmer language and denominated in KHR as set out above.
7. The ACAR may request or direct the introduction of additional procedures to implement this Circular.

Notification 355 – dated 3 September 2021

Notification 355 reminds enterprises that as per the Law on Accounting and Audit, enterprises have an obligation to keep accounting records, prepare financial statements (in accordance with prescribed standards), and submit audited financial statements along with other obligations stated in the Law.

The implementation of Sub-Decree 79 which outlines the fines for violations of the Accounting and Audit Law will come into effect from 11 September 2021 (after a 1 year delay).

From 11 September 2021 ACAR will begin conducting onsite inspections at enterprises and will start to issue fines, as set out in Sub-Decree 79, for those enterprises that are in violation of the Law on Accounting and Audit.

Please also refer to our related updates at:

• https://www.dfdl.com/resources/legal-and-tax-updates/cambodia-requirement-to-submit-financial-reports-for-independent-audits/
• https://www.dfdl.com/resources/legal-and-tax-updates/requirement-to-submit-financial-reports-for-independent-audit/
• https://www.dfdl.com/resources/legal-and-tax-updates/cambodia-june-2020/

Tax services required to be undertaken by a licensed tax agent in Cambodia are provided by Mekong Tax Services Co., Ltd, a member of DFDL and licensed as a Cambodian tax agent under license number – TA201701018.

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

Vattanakpagna Chhun
Senior Accounting Manager 
vattanakpagna.chhun@dfdl.com