Foreign diplomatic or consular missions, international organizations and agencies of technical cooperation

Cambodia Tax: VAT Refund/Exemption for Official Function of Foreign Diplomatic or Consular Missions, International Organizations and Agencies of Technical Cooperation

Non-taxable supplies for diplomatic missions and international organizations shall be as follows:

1. The imports of goods for or by foreign diplomatic or consular missions, international organizations and agencies of technical cooperation of other governments for use in the exercise of their official function shall be treated as non-taxable supplies. Non-taxable supplies shall only be allowed on the certification by the head of mission and the Ministry of Foreign Affairs and International Cooperation to the Tax Department that the goods are being imported for use in the above purpose. International organizations are established under international law such as the World Bank, not simply international non-profit organizations (NGOs) in general.

2. Foreign diplomatic and consular missions, international organizations and agencies of technical cooperation of other governments may apply for a refund [1] of the tax on those goods locally purchased that are listed on an enumerated list which shall be determined by Prakas of the Ministry of Economy and Finance. The tax refund shall be granted only on the certification by the chief of mission and the Ministry of Foreign Affairs and International Cooperation to the Tax Department that the goods are being purchased for use in the exercise of the official function of the relevant unit.

Note:

Unless the Ministry of Economy and Finance (MEF) has approved an VAT exemption for a specific organization for non-profit activities in the public benefit, so all VAT-registered entities must charge VAT on their supplies to diplomatic or international organizations. These organizations may then follow the VAT refund procedure to receive the input VAT back.

[1] The claim for a refund of tax shall be made in accordance with the following conditions:

a) The claim must be in the form prescribed by the Tax Department;

b) Each purchase invoice shall have a total amount exclusive of tax of 200,000 Riels or more;

c) Each claim shall have a total amount exclusive of tax of 1,000,000 Riels or more;

d) The claim may be made once a month only.

For the claim of tax refund, the Tax Department shall serve a notice of the acceptance or refusal to refund the tax within one month of the receipt of the claim.

According to Prakas No. 576 and 577, MEF, PrK released on 19 June 2018, change in process of claiming VAT refunds by Cambodian taxpayers.

Prakas 576 and 577 are as follows:

• • The timeframe for claiming a VAT refund should take approximately 40 working days and the process may be quicker for taxpayers that have obtained gold tax compliance status;
  •  The MEF has delegated its powers to General Director of the GDT to approve VAT refunds where the refund does not exceed 2,000 Million Riel (approximately USD 500,000), and this applies to all types of taxpayers;
  •  For taxpayers that have obtained gold tax compliance status, there is no restriction on the size of the refund that General Director of the GDT has been delegated to approve.