Cambodia Issues Decree on Tax for E-Commerce Transactions: How Can Businesses Comply?

 ASEAN Briefing

Ayman Falak Medina 

April 22, 2021

On April 8, 2021, Cambodia issued Sub-decree 65 on the implementation of value-added tax (VAT) on e-commerce transactions made by non-resident entities that do not have a permanent establishment (PE) in the country.  

Cambodia’s digital startups have helped blunt the economic impact as its garment manufacturing industry — which accounts for 80 percent of exports — has faced serious financial problems because clothing brands have either canceled orders or stopped placing new ones due to the COVID-19 pandemic.  

In addition, the government established a national e-commerce strategy in November 2020, which focuses on strengthening 10 sub-sectors:

1. Strategy and policy focus and institutional coordination;
2. Legal and regulatory frameworks;
3. SME regulations;
4. Information and communications technology (ICT) infrastructure;
5. Digital knowledge/skills infrastructure;
6. Payment systems;
7. Domestic e-commerce/trade logistics;
8. Cross-border trade;
9. Access to finance; and
10. Trade information and in-market support.

What are the obligations for non-resident entities?

What is the penalty for non-compliance?

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