Welcome to this edition of DFDL’s Cambodia Law Update. In this issue we present Cambodian regulations and information touching on the following:
- Tax Incentives in the Securities Sector
- Notification on Implementation of Provision of Tax on Salary which was amended by the 2015 Financial Management Law
- Promulgation of New Cambodian Land Traffic Law
- Prakas on Foreigner Work Permit and Foreigner Employment Card
- Joint Prakas on Adjustment to the Series of Public Services of the Annex Table Enclosed with the Joint Prakas № 985 SHV.BrK, dated 28 December 2012, on Provision of Public Services of the Ministry of Commerce
- Organization and Functioning of the Ministry of National Assembly-Senate Relations and Inspection
Tax Incentives In Securities Sector, Sub-Decree № 01 (RGC) 08 January 2015
This Sub-Decree aims to determine the types, activities and conditions which are subject to tax incentives in the securities sector as provided in Article 12 of the Law on Financial Management for the year 2010, which was promulgated by the Royal Kram № NS/RKM/1209/026, dated 16 December 2009.
The purpose of this Sub-Decree is to grant tax incentives in order to develop the securities sector in the Kingdom of Cambodia. This Sub-Decree shall cover the scope to be implemented: (1) company/enterprise issuing for sale equity securities and/or public debt securities which obtained permission from the Securities and Exchange Commission of Cambodia (SECC), and registered as securities trading in the permitted securities market; and (2) public investors holding and/or purchasing-selling state securities, equity securities, and/or debt securities which have been issued for sale to the public, and registered as securities trading in the permitted securities market.
Incentives on profit tax for company/enterprise issuing for sale equity securities and/or public debt securities are defined as follows:
- Company/enterprise issuing for sale equity securities and/or public debt securities which obtained permission from SECC and registered as securities trading at the permitted securities market within a period of three years starting from the date of this sub-decree comes into force shall be required to complete formalities submitting to the General Department of Taxation through SECC in order to obtain incentives by reducing the profit tax for 50% of the profit tax to be paid for the period of three years;
- Company/enterprise issuing for sale equity securities and/or public debt securities which obtained authorization from SECC and registered as securities trading at the permitted securities market shall receive exemption from profit tax completely within the period of five years commencing from the date of the sub-decree entering into effect.
The public investor shall obtain the reduction of withholding tax of 50% on the interest rate and/or premium received from the holding and/or purchase-sale of the state securities, equity securities and debt securities for a period of three years commencing from the date of this sub-decree entering into force.
This sub-decree shall be replaced the sub-decree № 70 ANKr.BK, dated 22 April 2011, on Tax Incentives in the Securities Sector.
Implementation of Provision of Tax on Salary, which was Amended by the 2015 Financial Management Law, Notification № 048 (General Department of Taxation), 06 January 2015
This notification intends to inform employees and employers about the substance of the amendment to Article 47 of the Law on Taxation, promulgated by Royal Kram № NS/RKM/0297/03, dated 24 February 1997, in accordance with Article 11 of the 2015 Financial Management Law, promulgated by Royal Kram № NS/RKM/214/026, dated 18 December 2014, to be implemented for tax declaration commencing January 2015 onward.
Promulgation of Cambodian New Land Traffic Law, Royal Kram № NS/RKM/0115/001 (Royal Palace) 09 January 2015
This Royal Kram promulgates the Law on Land Traffic. The goal of this new law is to ensure safety, order in road trafficking, and to protect the health and lives of people and animals, property and the environment. The objectives of this law are: (a) to provide awareness about safety of land traffic; (b) to manage land traffic safety; (c) to maintain order of land traffic; and (d) to prevent/curb offenses caused by road use. This law shall cover the scope for implementation in all activities related to land traffic in the Kingdom of Cambodia.
All legal norms which have been created in order to implement the law on land traffic, which was promulgated by the Royal Kram № NS/RKM/0207/007, dated 8 February 2007, shall continue in effect until the new text is amended, or deleted except for any provisions contrary to the spirit of this law.
Proper driving license holders, in accordance with the law on land traffic which was promulgated the Royal Kram № NS/RKM/0207/007, dated 8 February 2007, can continue to use their driving license until its validity is expired.
Prakas on Foreigner Work Permit and Foreigner Employment Card, Prakas № 195 (MoLVT) 20 August 2014
It is decided that owners or directors of enterprises or establishments as stated in the Article 1 of the Labor Law who employ foreign labor or a foreigner who enters to do business in the Kingdom of Cambodia shall properly complete the application for a work permit and an employment card. This Prakas aims at informing a foreigner: (i) who holds a residential fixed term visa; (ii) who has already entered the Kingdom of Cambodia, but he or she has not yet held this certificate shall have a certificate issued by the Labor Health Department of the Ministry of Labor and Vocational Training stating that he/she can work; (iii) who has entered to work in the triangular zone of Cambodia, Vietnam and the Lao PDR (permitted only for foreigners who have Vietnamese and Lao nationality and living near the border of four provinces of the Kingdom of Cambodia such as Steung Treng, Kratie, Mondulkiri and Ratanakiri provinces); (iv) who has been permitted to permanently stay in Cambodia shall oblige to apply for a work permit and an employment card; and (v) who has already entered the Kingdom of Cambodia, but has not yet held this certificate shall have the certificate issued by the Labor Health Department of the Ministry of Labor and Vocational Training stating that he/she can work.
The Tax payment for valid extension of an employment card and a work permit shall be made before the end of March of each year. In the case of failure to extend the validity following the due date, the enterprise or establishment concerned shall be considered to keep or to employ foreign labor without employment card and work permit.
Adjustment to Series of Public Services of the Annex Table Attached with the Joint Prakas № 985 Shv. Br.K, Dated 28 December 2012, on Provision of Public Services of the Ministry of Commerce, Joint Prakas № 1643 Shv.Br.K (MEF), 16 December 2014
This Joint Prakas informs the amendment to the series of public services of annex table enclosed with the Joint Prakas № 985 SHV.BrK, dated 28 December 2012, on Provision of Public Service of the Ministry of Commerce to be replaced by the series of public services as stated in the table of the first annex attached with this Joint Prakas.
This Joint Prakas details that the Export Management Fee (EMF) for goods to be exported to foreign countries shall be determined by price in accordance with the type and items of goods as stated in the annex table of this Joint Prakas. The EMF shall be exempted for any exported goods, which have the total price under EUR 6,000, for export to the EU, and under the price of USD 800 for export to other destinations.
Organization and Functioning of the Ministry of National Assembly-Senate Relations and Inspection, Sub-Decree № 03 ANKr.BK (RGC), 12 January 2015
This Sub-Decree aims to determine the organization and functioning of the Ministry of National Assembly-Senate Relations and Inspection. The Ministry is assigned by the Royal Government to lead a mission and manage all facility works in communicating with the National Assembly, Senate and inspection work in all sectors in the Kingdom of Cambodia aimed at preventing, curbing, improving, and taking action against corruption, violation by power and inactivity matters.
The duties and roles of the Ministry of National Assembly-Senate Relations and Inspection are detailed in this Sub-decree.