Other deductible expenses

Other deductible expenses for Cambodia Tax

Unpaid expense due to unrelated parties is deductible expense for tax on income (profit) if it is a genuine liability. For this case, accounting and tax concept are the same idea because it is expense, so it does not have any adjustment for this expense to tax on income (profit) if we recorded as expense in accounting system ready.

Example 1

Assume that LLL Company received invoice from MMM Company on 30 December 2018. Invoice amount of $10,000 (excluded VAT) for consulting service.

Because of financial issue, LLL Company did not pay this amount, but LLL Company will pay on 15 January 2019.

Required

Suggest accounting treatment and Cambodia Tax treatment for 31 December 2018.

Answer

For this case, accounting and tax treatment are the same way, so on 31 December 2018 , amount of $10,000 is accounting and tax expense.

If LLL Company recorded this expense in book ready, so no need to make tax adjustment for tax on income (profit) in 2018.