The Cambodia Restaurant Association (CRA) organised a workshop titled "Tax, Accounting, and Auditing in the Food Industry" at the Olympia City Hotel on February 29, 2024. The event provided valuable insights into the importance of regulatory compliance for the restaurant business, as well as practical knowledge on tax laws, accounting standards, and auditing practices.
The event featured a number of speakers: Touch Cheakado, Bureau Chief of the Department of Small and Medium Taxpayers within the General Department of Taxation (GDT); Soeun Botte, Deputy Director of the Department of Legal Affairs and Compliance at the Non-Banking Financial Services Authority (NBFSA); Seng Tola, Deputy Secretary General of the Accounting and Auditing Regulator of Cambodia (ACAR), and Oknha Tan Khee Meng, Managing Partner of Baker Tilly Cambodia, and Tep Panhary, Finance Compliance Manager of Thalias Hospitality Group.
In his welcoming speech, Arnaud Darc, President of the CRA, illustrated the importance of regulatory compliance for the restaurant business by sharing an anecdote about an ‘unexpected demand’ his company, Thalias Hospitality Group, faced while attempting to renew its Good Hygiene Practice Certificate.
“Despite fulfilling our obligations and settling all required fees, we were confronted with a request for an 'extra fee' absent any formal invoice,” he shared. “This demand stood at odds with our ethical backbone and had significant implications for our financial transparency and tax audit readiness. In that moment of uncertainty, we upheld our principles, insisting on clarity and righteousness from the Ministry of Health.”
He said he believes this case helps to shed light on the intricate balance that must be maintained between operational excellence and adherence to regulatory compliance. “A balance that is the lifeblood of our industry,” he emphasised.
Key Tax, Accounting And Auditing Requirements For Businesses In Cambodia
Representing the GDT, Cheakado delivered a presentation emphasising the necessity for businesses to register with the tax administration if they are economically active and have a physical address.
He further stressed the importance of notifying the tax administration in the event of any changes in business activities or the decision to transfer or cease operations. Discussing compliance for accounting records, Botte highlighted that Cambodian business owners are expected to maintain their records in the Khmer language, while English is only acceptable for businesses using computerised accounting systems, provided that this has been priorly noted on ACAR’s official E-filing system.
He also mentioned that ACAR allows the use of two financial reporting standards:
- For public companies, the CIFRS standard is applicable (this includes securities issuers, commercial banks, deposit-taking financial institutions, and insurers).
- If the enterprise is not a public company, either CIFRS or CIFRS for SMEs can be used.
Tax Framework For Restaurant Business Operators In Cambodia
The workshop provided an in-depth overview of the tax regulations relevant to restaurant operators in Cambodia, focusing on key tax obligations and compliance requirements.
During his presentation, Oknha Tan Khee Meng highlighted concerns faced by members of the Malaysian Business Chamber of Cambodia (MBCC) regarding tax invoices. These include challenges encountered when purchasing products from small-scale sellers or vendors who do not typically issue invoices, as well as instances where renovation companies also fail to issue proper invoices.
Tan further discussed the following key points:
- Tax Compliance: Emphasising the importance of fulfilling tax obligations and meeting regulatory requirements;
- Inspections: Mentioning the possibility of tax inspections to ensure accurate reporting and compliance with tax laws.
- Enforcement and Appeal: Highlighting the need to understand the enforcement and appeal processes in case of disputes or non-compliance with tax authorities.
Accounting And Auditing Practices In The Food Sector
Tan also discussed the following points on regulatory compliance for accounting practices:
- The importance of maintaining proper accounting practices, including accurately recording financial transactions, categorising them appropriately, and ensuring adherence to accounting standards.
- The significance of maintaining comprehensive supporting documents (bookkeeping, accounting records, financial statements) for all financial transactions.
- The need for businesses to have capable personnel responsible for bookkeeping, maintaining accounting records, and preparing financial statements
- The importance of timely reporting to both tax authorities and ACAR.
On auditing, Tan outlined the requirements for submitting financial statements (FS) based on whether external auditing is necessary:
- For businesses that require externally audited FS, Tan highlighted the need to appoint an audit firm and submit the audited FS to ACAR before the specified deadline.
- Businesses that are not required to have externally audited FS must file their financial statements to ACAR in the required format before the deadline.
After all presentations had been delivered, Touch Cheakado, Seng Tola, Tan Khee Meng and Tep Panhary engaged in a panel discussion moderated by Anthony Galliano, Treasurer of the CRA. The panel delved into effective financial management, covering essential accounting practices for restaurant business operators, including maintaining accurate financial records, managing cash flow, and controlling costs.
The benefits of utilising accounting software and tools for streamlining financial processes and facilitating decision-making were also highlighted. The panellists emphasised the importance of establishing robust internal control systems to ensure compliance with accounting standards and regulatory requirements.
Furthermore, the benefits of conducting regular audits, such as identifying operational inefficiencies, detecting fraud, and enhancing overall business performance, were thoroughly discussed.
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