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  • Crypto Currency is Prohibited in Cambodia
    Crypto Currency is Prohibited in Cambodia

    On the 5th of December 2017, the National Bank of Cambodia (NBC) announced that Crypto Currency like BitCoin and related instruments are not permitted by the laws, and the NBC does not recognize it. Crypto Currency advertisement and operation will put public at risk since it can be used as means for money laundering, financial termism and black market.  The NBC prohibits all banks and financial institutions from performing any transactions related to Crypto Currency and other related instruments, which is not recognized by the NBC.

    Source: Letter issued by the National Bank of Cambodia on December 5, 2017.

    Written on Friday, 08 December 2017 10:30 in Blogs Be the first to comment! Read 30 times
  • GDT now allows you to pay the tax man online
    GDT now allows you to pay the tax man online

    Mr. Kong Vibol, director of the General Department of Taxation (GDT), announced at the tax seminar yesterday that GDT has officially launched e-payment platform that allows individual and corporate taxpayers to pay their obligations online, directly through bank account or at local tax department branch with less procedural steps. He said that the e-payment platform is currently only available for taxpayers that hold account with Vattanac, Acleda and Canadia banks. He added that GDT will launch a separate e-filling system early next year that would allow taxpayers to submit relevant documents online without the need of mailing them to tax authorities or submitting them in person. However, a taxpayer expressed her opinion that “many taxpayers will not be familiar with the technology, and this could prevent them from benefiting from system and it will take time before everything runs smoothly.”

    Source: The Phnom Penh Post, 21 November 2017

    Written on Monday, 27 November 2017 07:08 in Blogs Be the first to comment! Read 44 times
  • Minimum Wage for Workers in Textile, Garment and Footwear Industry for Year 2018
    Minimum Wage for Workers  in Textile, Garment and Footwear Industry for Year 2018

    At the 05th of October 2017, Ministry of Labor and Vocational Training issued an announcement about the determination of minimum wage for employees in textile, garment and footwear sector in 2018.  According to the announcement, the tripartite Labor Advisory Committee consisting of representatives of employees, employers and the royal government of Cambodia had discussed about the minimum wage in 2018 based on the seven determinants. Following the discussion, the representatives of employees set the minimum wage at $170, representatives of employer at $162 and the government at $165. As a result of deliberation, the minimum wage in 2018 is set at $170 effective from the 01st of January 2018.

    Furthermore, the announcement elaborates that other benefits that the employees used to enjoy will remain the same. Plus other benefits, on average, the employee will receive at least $187 to $198. Besides, the government also lessens the burden of the employers by allowing them to suspend the installments of tax on profit for five years (2018 to 2022) and removing export management fee with the Ministry of Commerce.

    On the same date, Ministry of Labor and Vocational Training further enforces the announcement by issuing Prakas No. 396 on the Determination of Minimum Wage for Employees in Textile, Garment and Footwear Sector in 2018. Article 1 of the Prakas states that the minimum wage for employees in textile, garment and footwear sector is officially set at $170 per month. According to Article 2, for employees in probationary period, the minimum wage is set at $165 per months and after the probationary period, they will receive $170 per months. In addition to that, other benefits will remain the same and the minimum wage will take effect at 01st of January 2018 according to Article 3 and 4.

    Source: Prakas No. 396 on dated 05 October 2017 on the Determination of Minimum Wage for Employees in Garment and Footwear Sector in 2018

    Written on Friday, 13 October 2017 08:28 in Blogs 2 comments Read 193 times
  • Prakas No. 559 on Instruction over Value Added Tax Implementation on Nontaxable Supplies
    Prakas No. 559 on Instruction over Value Added Tax Implementation on Nontaxable Supplies

    Ministry of Economic and Finance (MEF) has issued the Prakas No. 559 dated May 25, 2017 on the instruction of the implementation for VAT on non-taxable supplies in accordance with the Article 57 of the Law on Taxation amended by the Law on Financial Management 2017. This Prakas aims to clarify the goods and services those are non-taxable supplies in order to ensure the consistency of VAT implementation.
    The Prakas applies to the self-assessment taxpayers in making non-taxable supplies below:

    1. Public postal service
    2. Hospitals, clinics, medical and dental services, and the sale of medical and dental goods incidental to the performance of such services
    3. The services of transportation of passengers by a wholly state owned public transportation system
    4. Insurance services
    5. Primary financial services
    6. The importation of materials for personal use those are exempt from customs duties in accordance with the customs provisions
    7. Non-profit activities for serving the public interest
    8. Educational service
    9. Electric power and clean water
    10. Unprocessed agricultural products
    11. Solid and liquid waste removal or collection services

    The Prakas specifically defined the term of “primary financial services” and includes certain kind of transactions and services which fall under the term as follow:
    - The deposition operations and granting loans except fees relating to such granting loans.
    - The initial securities public offering in the market, securities trade or other financial instruments, and the clearing and settlement services in the securities market.
    - Money Exchange Service
    - Security Service
    - Trading of Unshaped Gold
    NOTE: There was a significant event that the public misunderstand and misinterpreted that this Prakas was issued to impose VAT on above 11 goods and services supplies. Regardless, the Prakas was issued to clarify that the aforementioned goods and services supplies are exempted from VAT and they are called “non-taxable goods and services supplies”.

    Written on Thursday, 29 June 2017 08:44 in Blogs 2094 comments Read 18531 times
  • Identity Card, Family Book or Resident Book is not for collateral, NBC said.
    Identity Card, Family Book or Resident Book is not for collateral, NBC said.

    On May 22, 2017, National Bank of Cambodia (“NBC”) issued an Instruction No. T7.017.420 SJN in purpose to make a caution to all Bank, Financial Institution, and Credit Operator for stop accepting the Identity Card or Family Book or Resident Book as collateral. Last year, on March 11, NBC already issued an Instruction No. T7.016.210 SJN for informing those institutions after NBC observed and found that the Identity Card or Family Book or Resident Book was accepted and taken as collateral to secure the loan in some Bank, Financial Institution, and Credit Operator.

    Since now, NBC has acknowledged that several Banks, Financial Institutions, and Credit Operators are still accepting the Identity Card or Family Book or Resident Book in securing and release loan. This action is illegal under the Code of Civil and other regulation in force. Under Instruction No. T7.016.210 SJN, NBC has explained that the Identity Card or Family Book or Resident Book has no any economy value to be the collateral. Those documents are just the legal documents issuing by competent authority to identify a person and population statistic. NBC already warned that if any banks, financial institutions and credit operators fail to comply with laws and regulations in force, that institution shall be punished under the Law on Banking and Financial Institution.

    Under the Instruction No. T7.017.420 SJN on May 22, 2017, NBC wants to instruct those Banking and Financial Institution to get more attention for complying with Instruction on March 11, 2016 and Law on Banking and Financial Institution effectively. In its letter mentioned that if any banks, financial institutions and credit operators fail to comply, they would face with penalties such as withdrawal the licenses or the Registration Permit or stop the business activity in accordance with Article 52 and Article 56 of Law on Banking and Financial Institution.

    Written on Monday, 22 May 2017 03:08 in Blogs 1235 comments Read 6410 times

News2

  • Prakas No. 448 on the Registration of Enterprises and Employee in the National Social Security Fund
    Prakas No. 448 on the Registration of Enterprises and Employee in the National Social Security Fund

    Ministry of Labor and Vocational Training has issued a Prakas on the registration of enterprise and employee in National Social Security Fund (NSSF) for all persons who are under the scope of the Labor Law of Cambodia. The Prakas aims at determining formality and procedure for registering enterprises, establishments and employees with Working Risk and Health Care Section of NSSF. It also obligates employers and owners of enterprise or establishment to register their entities with NSSF. Furthermore, employers and owners of enterprise or establishment have obligation to register employees with NSSF three days after the date of commencement of the work unless the employees have already possessed NSSF membership card. Non-compliance with this Prakas will result in penalty stipulated in Chapter five of Law on Social Security Fund.

    Source: Prakas No. 448 on the Registration of Enterprises/Establishments and Employee in the National Social Security Fund (NSSF), dated the 10th of November 2017.

    Written on Friday, 08 December 2017 10:29 in News Be the first to comment! Read 14 times
  • Government reduces tax load on MFIs receiving money from abroad
    Government reduces tax load on MFIs receiving money from abroad

    On 15th of November 2017, the Ministry of Economy and Finance (MEF) issued a Prakas to reduce withholding tax on interest from local microfinance institutions (MFIs) from 14 percent to 10 percent. The new Prakas aims at shrinking the expendable interest rates that MFIs take on loans from abroad to ensure the sustainability of microfinance sector. Also, the withholding tax rate reduction applies only on loans acquired abroad. It is known that the remaining 4 percent will be paid by the government.

    Experts said that “This Prakas is clearly intended to provide benefits to the people by reducing the cost of microfinance loans and MFIs on which these savings will be passed on to clients to be ensured.” This reflects the fact that the government has understood the MFIs’ Operations burden and the timeline for the reduction which will finish by the end of 2018, another expert said. He added that this period of time will give the MEF enough room to amend the fiscal policy, especially if a new government is formed after next year’s election. 

    Source: The Phnom Penh Post, 15 November 2017

    Written on Monday, 27 November 2017 07:02 in News Be the first to comment! Read 29 times
  • Prakas on Management of Payment Transactions Services Institution
    Prakas on Management of Payment Transactions Services Institution

    The National Bank of Cambodia (“NBC”) has issued a Prakas on Management of Payment Transactions Services Institution dated 14th June 2017. The Prakas is made to determine the procedure for licensing Payment Transactions Services providers, to encourage fair competition and innovation and to gain public trust.

    The Prakas governs both Payment Transactions Services providers and Banks. However, services such as information technology support, data storage and processor, payment transactions using bank’s location and so on are excluded from the Prakas’s purview.

    Unlike Third Party Processor, which is a service provider or processor to facilitate bank’s payment transactions services and operations, Payment Transactions Services provider is independent. The Prakas has stipulated the scope of business of Payment Transactions Services provider in Article 6 and 7 that it can engage in businesses such as deposit and withdrawal in payment account service, money transfer service, payment transaction service, providing short term credit, issuing electronic currency, money changer and so on. However, money that Payment Transaction Services providers have received from payment transaction and issuing e-currency is not deemed to be deposit.

    To operate as Payment Transactions Services provider, legal entities must obtain license from the NBC. Legal entities need to fulfill numbers of conditions to obtain license from NBC. For example, legal entities need to describe the type of payment transaction service that it will operate, business plan, evidences of capital sufficiency and so on. On top of that, the Prakas requires the legal entities to have minimum capital of 8,000 million Riel (around USD2 million) in cash and 5% of the minimum capital must be deposited with NBC. Nevertheless, the license to operate as Payment Transactions Services provider is valid in six years but it is renewable.

    With regard to fee, legal entities need to pay 500,000 Riel (around USD125) for application form plus inquiry and 2,000,000 Riel (around USD500) for having the documents reviewed. Also, legal entities are required to pay annual fee of 20,000,000 Riel (around USD5000).

    The Prakas also states about merger and acquisition in Article 24 that Payment Transactions Services providers must gain approval from NBC if it intends to merge with other institutions, transfer or be acquired in part or whole of its business or cease its business operation. Besides, NBC has right to delicense or suspend any Payment Transactions Services providers’ operation that fail to operate within six months, engage in fraud or forgery, be non-compliance with NBC’s supervision and so on.

    Written on Thursday, 10 August 2017 08:47 in News Be the first to comment! Read 312 times
  • Prakas on Modification of Prakas No: 047 MOC/SM dated in 2013 on Price Tag in Riels Currency
    Prakas on Modification of Prakas No: 047 MOC/SM dated in 2013 on Price Tag in Riels Currency

    On July 07, 2017, Ministry of Commerce has issued a Prakas No: 172 MOC/PK to modify the Prakas No: 047 MOC/SM dated January 23, 2013 concerning the price tag in Riels currency. This new Prakas was issued to impose all Traders, Venders, and Service Providers in Cambodia to put the price tag in Riels currency on their selling products and services. The Prakas is purposed to promote the transparency of the national currency over the goods, product, and service charged in Cambodia.

    However, some business area, called “Duty Free”, which are licensed by the Government to have price tag in foreign currency, they are required to have an approval from Municipal or Provincial Department of Commerce of the place of business. The approval is valid for one year and it is subject to be renewable. The approval shall be submitted with the required documents where consist of Application Form, Certificate of Incorporation, latest Patent Certificate, ID Card or Passport, and three of 4 X 6 photos. All Duty Free Shops who held an approval to have price tags in foreign currency has duty to pay the public free as stipulated in Public Official Fee of Ministry of Commerce.

    Written on Tuesday, 01 August 2017 08:29 in News Be the first to comment! Read 252 times
  • Filing of Annual Declaration of Commercial Enterprise
    Filing of Annual Declaration of Commercial Enterprise

    Ministry of Commerce has issued a new Prakas No. 107 MOC/SM on “Filing of Annual Declaration of Commercial Enterprise” on 05th April, 2017 and at the same time nulled Prakas No. 104 MOC/SM dated on 07th April, 2008.

    Since the registration system has been available to conduct online, filing annual declaration of Commercial Enterprise is too available and required to file online. All commercial enterprises will be sent a notice to file their annual declaration in the eleventh month and are required to start filing them including other references in the twelfth month counted from the date of their commercial registrations through online system. The duration for filing is provided for three months following from the beginning date of the abovementioned twelfth month
     
    In case any commercial enterprise fail to comply with this prakas to file the annual declaration, they will be imposed under penalties set force in the laws and this Prakas. The sole Prakas will penalize 1 Million Riels for such failure.

    The Prakas has indicated some particular information to be filled in the online system for all commercial enterprise including Taxpayer Identification Number (TIN), Tax Registration Date, Patent Certificate in the year of filing the annual declaration, number of employees including referenced documents specified on their duties, currently used phone numbers and email addresses of the company. It is, however, important to note that except Public Limited Company is required to submit other additional informations to the above listed which include financial statement and the company’s owner record.

    Written on Tuesday, 18 April 2017 02:59 in News 1121 comments Read 568 times