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VAT rules for non-resident operators in e-commerce

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The government has issued a prakas introducing new rules and procedures governing value-added tax (VAT) on goods and services provided via e-commerce. Hean Rangsey

VAT rules for non-resident operators in e-commerce

The Ministry of Economy and Finance has issued a prakas introducing new rules and procedures governing value-added tax (VAT) on goods and services provided via e-commerce.

The new legislation, dated September 8, primarily targets e-commerce transactions between Cambodian taxpaying consumers and sellers active in Cambodian territory who are non-residents and do not have permanent establishment in the Kingdom.

The taxable value of a supply is the transaction value, the prakas says, adding that any form of compensation arrangement other than cash shall be included in the value, based on market rates.

If the taxable value of the digital goods or services supplied does not represent the actual value, the tax administration may determine one, which shall be deemed valid until there is evidence accepted by the tax administration, the document adds.

The prakas complements Sub-Decree No 65, dated April 8, which regulates VAT on electronically supplied goods and services, and is designed in accordance with the E-Commerce Law, which came into force on November 2019.

The government recently launched a 15-year policy framework for the Kingdom’s evolving digital socioeconomic environment to pave the way for a thriving digital economy, as a new engine of economic growth.

Cited in an associated document, Minister of Economy and Finance Aun Pornmoniroth said the Cambodia Digital Economy and Social Policy Framework 2021-2035 sets out a vision of “building a vibrant digital economy and society to foster new economic growth and promote social welfare based on the normalisation of the ‘new normal’”.

He emphasised that the vision must be achieved by 2035, in accordance with three principles – “building a digital foundation”, “digital capture” and “digital transformation”.

“In the context of the Covid-19 crisis, the Cambodia Digital Economy and Social Policy Framework 2021-2035 will be an integral part of the post-Covid-19 economic recovery planning framework, covering the construction of digital infrastructure, attracting domestic and foreign investment, promoting new start-ups, increasing productivity and promoting economic competitiveness,” Pornmoniroth said.

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