The General Department of Taxation (“GDT”) issued Notification no. 776 GDT on the 17th of January 2022 (“Notification 776”) which delays the implementation of Prakas 542 MEF.P on the Rules and Procedure for the Implementation of VAT on E-Commerce (“Prakas 542”) to 31 March 2022.
 
Previously Instruction 20522 issued by the GDT on the 8th of December 2021 (“Instruction 20522”) had postponed the implementation of Prakas 542 to 31 December 2021.
 
What this delay means is that non-resident e-commerce providers who meet the sales threshold requirements to register under the simplified VAT system in Cambodia will need to do so before 1 April 2022. For those Cambodian self-assessment taxpayers that transact with non-resident e-commerce providers (B2B transaction) the VAT reverse charge obligation will only apply from 1 April 2022 meaning that the first VAT reverse charge declaration and payment would be due to be submitted on the 20th of May 2022 for manual returns or the 25th of May 2022 for e-filing.
 
The reason given for the delay in the implementation of Prakas 542 was to allow taxpayers, both resident and non-resident, more time to understand their respective obligations under this new regime from 1 April 2022 onwards. What isn’t clear is whether the registration requirement for non-resident e-commerce providers to complete the simplified VAT registration before 1 April 2022 applies to those providers that have Cambodia sales of USD15k or more in the first three (3) months of 2022 or whether it also includes those providers who had USD62.5k of Cambodia sales in the 2021 calendar year as was previously stated in Instruction 20552.
 
This is a welcome decision and will allow more time for implementing issues to be resolved with respect to the registration, declaration and invoicing process. To find out more about this update and the new VAT e-commerce regulations please note that we will be holding a webinar on the afternoon of the 18th of January 2022 with our distinguished guest speaker His Excellency Dr. Eng Ratana the Director of the Large Taxpayer Department of the GDT. Please click this link to register. To locate our earlier update on this topic which also provides further details on the registration process and VAT reverse charge please click here.
 
For assistance with the VAT registration process or with advice as to how these new regulations will apply to you in practice, please reach out to the author or your usual DFDL advisor.

Clint O'Connell
Partner, Cambodia Deputy Managing Director & Head of Cambodia Tax Practice
clint.oconnell@dfdl.com