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Salary Tax in Cambodia
1. Introduction
Most individuals living and working in Cambodia are aware that they have to pay tax on their salaries. As the obligation to declare this tax rests with the employer, most individuals do not give it much further thought.
2. Definition of Salary Tax
Tax on Salary is a monthly tax imposed on the salary that has been received within the framework of fulfilling employment activities (Article 41, Law on Taxation). Whether a person is an employee or an individual earning profit depends on “the degree of subordination to the employer” (Section 1.2 of Prakas 1173 on Tax on Salary). The governing Prakas outlines four criteria to assist in determining this. If two of these four criteria are met, an employment relationship exists: The person will be paid as long as he appears at a designated place to perform tasks outlined in a general (written or oral) agreement;