Supplies of goods and services free of charge

Lesson Summary-Supplies of goods and services free of charge for Cambodia Tax

Cambodia Tax is no free for goods or services, so free of charge is income for tax on income (profit).When company gave customers goods or services free, tax law assumed that your company sold these products or services to customers with market price. For accounting, it is zero income /revenue from free goods or services to customers.

Example 1

Assume ABC gave customers free goods because they are royal customers. Market price of these goods is $2,200 (included VAT).

Required

1.How much income from accounting purpose.

2.Suggest tax on income for free goods to customers.

Answer

1.Income for accounting purpose

It is zero income/revenue ($0) for accounting record.

2.Tax on income

Taxable income under tax on income (profit) for Cambodia Tax = 2,200/1.1=$2,000.