Service

Taxable Supply of Services Subject to to VAT for Cambodia Tax

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The supply of services shall be considered as taking place in the Kingdom of Cambodia if those services are performed in the Kingdom of Cambodia, except:

a) A supply of services in connection with immovable property is deemed to take place where the immovable property is located;
b) A supply of services in connection with transport is deemed to take place where the transport occurs;
c) A supply of services rendered for use or consumption outside the Kingdom of Cambodia shall be considered as having been made in the Kingdom of Cambodia.

Valued Added Tax (VAT) is applicable on the taxable supply of services. An entity registered under the VAT provisions is required to charge VAT on all services of taxable supplies (it is called output VAT for service supply). Such entities can offset the VAT paid on purchases ( it is called input VAT for purchase) against their output VAT.

Services are not goods, land or money. For Example, training, consulting, audit,accounting services etc are service supply. A supply of goods incidental to the supply of services is part of the supply of services.

Taxable supplies are the supply of services for taxable sale except it is under scope of VAT Exemption Supply/Non-taxable goods and services

VAT rate is 10% for standard rate. VAT payment for tax authority is as follows.

VAT payable = VAT output[1] – VAT input[2] – VAT credit from previous months[3]

[1] VAT output = selling price included any taxes/1.1 x 10% or

VAT output = selling price included any taxes but before VAT x 10%

[2] VAT input = purchase price included any taxes/1.1 x 10% or

VAT input = purchase price included any taxes but before VAT x 10%

[3] VAT Credit from previous months occur when VAT input is higher VAT output.



Example 1

ABC is consulting firm in Cambodia. The following transactions for November 2018 are as follows.

-Purchase of $22,000 (included VAT)

-Purchase of $500 ( VAT exemption supply/non credit VAT), for example, electricity, water supply, diesel etc.

-Consulting fee of $33,000 (included VAT).

Required 

Assume VAT credit from previous months is $200.

1. Calculate VAT input during November 2018.

2.Calculate VAT output during November 2018.

3.Calculate VAT payable(credit) for November 2018.

Answer 

1. Calculate VAT input 

VAT input occurred from taxable purchase.

VAT input = purchase price included any taxes/1.1 x 10%

VAT input =$22,000/1.1 x 10%=$2,000

so VAT input = $2,000

2.Calculate VAT output

VAT output occurred from taxable supply.

VAT output = selling price included any taxes/1.1 x 10%

VAT output =$33,000/1.1 x 10%=$3,000

so VAT output = $3,000

3.Calculate VAT payable(credit) for November 2018

VAT payable (credit) = VAT output – VAT input – VAT credit from previous months=3,000-2,000-200=$800 >0

So VAT payable = $800 . This amount will be paid to tax authority is no later than the 20th day of the following month (December 2018).