On the 5th of April 2023 the Accounting and Auditing Regulator (“ACAR”) issued Notification 0013/23. ACAR/N reminding enterprise owners and directors of non-profit organisations of their obligation to submit, via the ACAR e-filing system, their annual financial statements for the 2022 financial year to the ACAR by the required due date.

For enterprises and non-profit organsiations which are not subject to a independent financial audit the due date for submitting their 2022 financial statements to the ACAR is the 15th of April 2023. As the 15th of April 2023 falls on a Saturday this year, and with Friday the 14th being a public holiday, we suggest that the e-filing of the financial statements be carried out by Thursday the 13th of April 2023.

For those enterprises and non-profit organsiations that are subject to a independent financial audit the due date for filing their financial statements to the ACAR is the 15th of July 2023.

Penalties

The requirement to submit financial statements to the ACAR for those enterprises and non-profit organisations that do not have a independent financial audit was introduced from the 2021 financial year i.e. the submission of the 2021 unaudited financial statements was due by the 15th of April 2022. Given that 2022 was the first year for the filing obligation the ACAR extended the due date on a number of occasions during - ultimately the due date was extended to 30 June 2022.

We do not anticipate that the ACAR will extend the due date for filing the 2022 unaudited financial statements.

For those enterprises and not-for-profit organisations that failed to register with the ACAR and submit their 2021 unaudited financial statements by 30 June 2022 the ACAR has issued penalty notices which in some cases can be as high as USD3,000 to USD5,000.

Under Sub-Decree 79, which outlines the fines for violations of the Accounting and Audit Law that came into effect from 11 September 2021, violations for failure to register with the ACAR and submit unaudited financial statements by the due date can include:

• Failure to prepare financial statements according to accounting standard: The penalty can range from KHR 6,400,000 to KHR10,000,000.
   
• Failure to submit or late submission of annual financial reports to ACAR: The penalty can range from KHR1,200,000 to KHR2,000,000.
   
• Failure to maintain financial statements according to the accounting standards for tax obligation: The penalty can range from KHR 4,800,000 to KHR10,000,000.
   
• Failure to keep proper accounting records: The penalty can range from KHR8,000,000 to KHR10,000,000.
   
• Not holding accounting records: the penalty can range from KHR6,400,000 to KHR10,000,000.
   
• Failure to submit financial statements to independent audit: the penalty can range from KHR1,600,000 to KHR20,000,000.
   
• The use of different accounting period from the standard period specified in the accounting and auditing law without approval: The penalty can range from KHR800,000 to KHR2,000,000.
   
• Failure to use Khmer language in accounting records and financial reports: The penalty can range from KHR800,000 to KHR2,000,000.
   
• The use of another currency besides Khmer Riel in accounting records and financial reports without approval: The penalty can range from KHR800,000 to KHR2,000,000.

For more information on the ACAR filing process, fees and background please refer to our earlier updates below:

https://www.dfdl.com/resources/legal-and-tax-updates/cambodia-tax-alert-acar-deadline-for-submission-of-financial-statements/

https://www.dfdl.com/resources/legal-and-tax-updates/cambodia-submission-of-annual-financial-statements-and-use-of-english/

https://www.dfdl.com/resources/legal-and-tax-updates/cambodia-use-of-khmer-language-and-currency-in-financials-and-onsite-inspections/

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

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.