QIP’s: could your business be eligible for a tax holiday?

In order to encourage rehabilitation and growth in the Cambodian economy, in 1994, the Cambodian government came up with an incentive scheme to attract investment in the Kingdom. The scheme provides that candidates can apply to the Cambodian Development Council (CDC) for recognition as a Qualified Investment Project (QIP). This grants them a holiday on income tax and/or customs duties for up to nine years.

If the CDC approves the application, the business will be granted a tax holiday based on the formula below. Note that it is the project itself, rather than the company or entity that qualifies for the exemption, meaning that non-QIP income will still be liable for tax.