In this episode of B2B Cambodia’s 'Tax Update', Nith Nitikar, Associate at Tilleke & Gibbins, shares the latest updates on Public Lighting Tax (Prakas No. 168).
Who Does Public Lighting Tax Apply To In Cambodia?
“Public Lighting Tax is applies to all importers or producers of all alcoholic beverages and cigarettes in Cambodia," explained Nitikar.
Importers can be taxpayer entities themselves…. or they can provide a grant authorisation to another entity to import the taxable product in Cambodia on their behalf. Producers can be… the owners producing [taxable] products in Cambodia by themselves, or they can hire another entity or company to produce the product for them.
What Is The Latest Update On Public Lighting Tax In Cambodia?
Nitikar explained that the Public Lighting Tax rate was recently increased from 3 to 5 per cent following the implementation of Sub Decree 286, dated September 20, 2023. This was initially supposed to implement from January 1, 2024 onwards, however, the Ministry of Economy and Finance issued a follow up Prakas (No. 168) on March 20, 2024 that delayed the implementation of the increased Public Lighting Tax rate to April 1, 2024.
She added that the Prakas also provides further clarity on the tax collection management of Public LightingTax.
If you have Company A producing beer and then supplying that beer [by themselves], we would [consider] them the taxable person. But if the taxable person (Company A) who produced the beer hires Company B, who produces a different kind of alcoholic beverage, like whiskey, that whiskey company will be deemed as the authorised person because they produce the whisky for Company A.
“This Prakas (No. 168) [provides more clarity to] who the ‘taxable person’ and the ‘authorised person’ are… and who has to fulfill their obligations to the General Department of Taxation (GDT). The authorised person has to file and submit the relevant documents to the GDT informing them before they produce or import any taxable products in Cambodia,” she added.
In the event that the GDT finds a ‘taxable person’ doing business with an ‘authorised person’ that did not fulfill their tax obligations, the GDT will order the authorised person to stop producing or importing products for the taxable person. This is very important to highlight under the this new Prakas in terms of the tax collection management.
When Does Public Lighting Tax Have To Be Paid In Cambodia?
“Public Lighting Tax is due and paid once at the time of supplying the first taxable product after production or import in to Cambodia,” stated Nitikar.
She also highlighted that taxable entities are required to pay the Public Lighting Tax no later than the 20th day of the month, following the month in which the product is produced or imported.