DFDL Cambodia

Prakas No. 071 MEF.P.GDT on Incentives for the Voluntary Correction of Tax Declarations Prakas 071 was signed on the 30th of January 2024. Prakas 071 amends the application of Prakas 217 issued by the Ministry of Economy and Finance in March 2022.

“Amnesty is as good for those who give it as for those who receive it. It has the admirable quality of bestowing mercy on both sides.”

- Victor Hugo

Prakas No. 071 MEF.P.GDT on Incentives for the Voluntary Correction of Tax Declarations (“Prakas 071”) was signed by the Deputy Prime Minister and Minister of the Economy and Finance Dr. Aun Pornmoniroth on the 30th of January 2024.

Prakas 071 amends the application of Prakas 217 MEF.P (“Prakas 217”) that was issued by the Ministry of Economy and Finance in March 2022. To read more about Prakas 217 and the incentives it provided please click here.

Prakas 071 applies to self-assessment taxpayers who wish to amend their previously submitted tax declarations due to a oversight or unintended error. Under Prakas 071 self-assessment taxpayers who voluntarily submit a request to correct their accounting records and tax declarations before 30 June 2024 will be exempted from administrative sanctions including additional tax, interest and penalties.

There are some caveats contained in Prakas 071 as to the exemption of administrative sanctions as follows:

(1) The request to amend accounting records and tax declarations must relate to transactions that occurred before January 2024 i.e. accounting records and tax declarations relating to the period post 1 January 2024 will not qualify for the exemption.

(2) If the period to which the disclosure relates is already subject to a tax audit the exemption of administrative sanctions will only apply if the disclosure is made before the issue is discovered by the tax auditor.

(3) If a taxpayer submits a request to amend their accounting records and tax declarations after the same issue has been discovered by a tax auditor, during the course of a tax audit, then the taxpayer will need to pay a penalty of 10% on the underpaid tax along with monthly interest charge of 1.5%. The amount of penalty and interest paid by the taxpayer as a result of their disclosure can be used to offset any penalties and interest on the same issue if it is later re-assessed by a tax auditor at the conclusion of the tax audit.

Any type of tax amnesty is warmly welcomed by the business community and the Cambodian government should be applauded for encouraging tax compliance by providing this window of opportunity for taxpayers to put their tax affairs in order as we come out of the COVID period.
There are a few red flags with respect to the wording contained in Prakas 071 and how it may be subject to different interpretation. Prakas 071 amends the earlier Prakas 217 – it does not abrogate it. When referring to cleansing previous discrepancies via a voluntary disclosure Prakas 217 contained an element of subjectivity that can be applied by the GDT when determining if a taxpayer qualifies for the incentives. Prakas 217 detailed that the underpaid tax payable under a voluntary disclosure must have resulted from an unintended error rising from a lack of understanding of the tax regulations, negligence or a miss-understanding.
The other key point to note is the timing of the discovery of a tax issue during the course of a tax audit that may restrict how the exemptions outlined in Prakas 071 apply. From the taxpayers perspective discovery of a tax issue would most probably be recognized when the tax issue is included in a formal Notice of Tax Re-Assessment. A tax audit officer however may have a different opinion and try and argue that discovery of the issue takes place at a earlier date i.e. at the time a draft re-assessment was issued to the taxpayer. 
To obtain the full benefit of the incentives on offer a voluntary disclosure, wherever possible, should be made before the taxpayer receives a formal notice from the GDT of a tax audit investigation for the period in which the underpaid tax occurred and before the 30th of June 2024!
Under Prakas 071 where a voluntary disclosure is made after the tax issue is discovered by a tax auditor the taxpayer shall be subject to an additional penalty of 10% and late interest of 1.5% when they request a voluntary disclosure. If additional penalties and late interest are assessed upon the completion of the tax audit the earlier penalty and interest payment made by the taxpayer under the voluntary disclosure application can be used to offset the final re-assessment of the same issue.
To discuss how DFDL can assist you with being able to best utilize the incentives under Prakas 071 and how to discuss the benefits of a tax compliance review please contact the author or your usual DFDL advisor.

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.

Contact us

Clint O'Connell
Partner, Head of Cambodia Tax Practice

Please Login or Register for Free now to view all updates and articles

In addition to free-to-view updates and articles, you can also subscribe to the full Legal Centrix Vietnam Service including access to:

  • Overview notes on the law
  • Thousands of high quality translations of legislation covering all key business areas
  • Legal and tax updates
  • Articles on important legal and tax issues
  • Weekly email alerts
  • Sophisticated web platform and search

Legal Centrix is trusted by top law and accounting firms.

DFDL Cambodia

DFDL established its headquarters in Cambodia in 1995. DFDL is licensed as an investment company by the Council for the Development of Cambodia and the Cambodian Investment Board. We are also registered as a private limited company with the Ministry of Commerce. Under these licenses and registrations, we are permitted to provide business consulting, tax and investment advisory service of an international nature.

On 1 March 2016, DFDL and Sarin & Associates joined forces and established a commercial association and cooperation in order to form a new business transactions platform to serve clients with interests in Cambodia and across the expanding ASEAN marketplace.

DFDL and Sarin & Associates have worked together for over 10 years in Cambodia. Sarin & Associates has long been recognized for providing advice to companies in Cambodia in several sectors, such as telecommunication, energy, retail, real estate, financial services, banking, etc.

Our clients are major international and Asian foreign investors in Cambodia, including large foreign and Asian financial institutions. We have been involved in major projects in Cambodia including electricity projects, aviation, telecommunications, infrastructure projects and large real estate projects.

Click here to view the author's profile



  • Cambodia
  • Personal Income Tax
  • Legal Updates

Related Content

Recent updates

Cookies On
Our Website
We use cookies on our website. To learn more about cookies, how we use them on our site and how to change your cookie settings please click here to view our cookie policy. By continuing to use this site without changing your settings you consent to our use of cookies in accordance with our cookie policy.