Salary Tax

orichá · Post by **orichá** » Wed Jan 04, 2023 8:00 am

Stupid question...?

...An expat friend was offered a job not long ago. The employer said salary tax for the first six months would be 20%. I looked online and discovered only non-residents are taxed at a 20% flat rate for any income generated in Cambodia, such as from trade or sales... But presumably, those with E-type visas are classed as residents and should be taxed at the normal rates depending upon their salary bracket, 5, or 10 or 15 percent, etc...

So, if my friend has lived in Cambodia for some years as a resident, then how can this 20% rule apply? IS there any such rule? Because I could not find any information about a "six-month" rule for withholding 20% of salary...

Has anyone had experience with this?

Post by **Freightdog** » Wed Jan 04, 2023 8:08 am

I don’t know about Cambodia, but another country that I have dealings with have a flat rate tax for certain foreign workers only, (27% on everything earned) imposed by the government. Must have a residence visa and work permit. It’s a labour law concession to allow foreigners to work in the country. The local tax rates are different for natives of the country, with 27% being the top rate.

If you find out, It would be interesting to know.

orichá · Post by **orichá** » Wed Jan 04, 2023 10:55 am

I know for sure that Malaysia has a six-month 20% tax rule for foreigners...

Is there no expat here here, in CAMBODIA right now, who has experience starting a job here on a salary!?

Do you know, is there, or is there not, a 6-month 20% tax -- before the regular rate kicks in?

Lol...

Bluenose · Post by **Bluenose** » Wed Jan 04, 2023 12:01 pm

I think you have to be here for 6 months before you can be classed as resident. Non-residents pay 20%.
You mentioned your friend has been living here for some years. This is where it might get a little complicated (especially now there seems to be a little tightening up of the rules and increased enforcement) if they haven't been following the rules, eg extending on an EB basis when not working or working without a work permit.
On the other hand, the fact that the employer mentioned tax seems to suggest they may be aware of the rules. If possible, the best way is to have a contract that states a nett salary and specifies that all liability for tax payments rests with the employer

xandreu · Post by **xandreu** » Wed Jan 04, 2023 12:14 pm

A reply I got from PSD-Kiwi when I asked a similar question a while back, if it helps.

PSD-Kiwi wrote: ↑Thu Dec 30, 2021 1:41 pm A Cambodian resident taxpayer includes any physical person who: has residence in Cambodia, or. has a principal place of abode in Cambodia, or. is physically present in Cambodia for more than 182 days in any 12 month period ending in the current tax year.

A non-resident is a person who does not meet the above criteria.

A 12 month Visa Extension of Stay alone does not make a person resident for tax purposes.

orichá · Post by **orichá** » Wed Jan 04, 2023 12:29 pm

xandreu wrote: ↑Wed Jan 04, 2023 12:14 pm A reply I got from PSD-Kiwi when I asked a similar question a while back, if it helps.

PSD-Kiwi wrote: ↑Thu Dec 30, 2021 1:41 pm A Cambodian resident taxpayer includes any physical person who: has residence in Cambodia, or. has a principal place of abode in Cambodia, or. is physically present in Cambodia for more than 182 days in any 12 month period ending in the current tax year.

A non-resident is a person who does not meet the above criteria.

A 12 month Visa Extension of Stay alone does not make a person resident for tax purposes.

Okay, I see ... But the tax residency is measured only by presence/residency in country for a period exceeding 6 months in any given tax year.

My friend has not left Cambodia for the past 3 years since the beginning of 2020... But if his job starts at the beginning of the tax year, i.e.:: January? ...then maybe he still doesn't qualify!? Lol...

As you say, one should check the contract...

I doubt if there is any government documentation online that states this rule at all clearly ... Like when does the tax year commence?

----

Kammekor · Post by **Kammekor** » Wed Jan 04, 2023 1:26 pm

orichá wrote: ↑Wed Jan 04, 2023 12:29 pm
xandreu wrote: ↑Wed Jan 04, 2023 12:14 pm A reply I got from PSD-Kiwi when I asked a similar question a while back, if it helps.

PSD-Kiwi wrote: ↑Thu Dec 30, 2021 1:41 pm A Cambodian resident taxpayer includes any physical person who: has residence in Cambodia, or. has a principal place of abode in Cambodia, or. is physically present in Cambodia for more than 182 days in any 12 month period ending in the current tax year.

A non-resident is a person who does not meet the above criteria.

A 12 month Visa Extension of Stay alone does not make a person resident for tax purposes.

Okay, I see ... But the tax residency is measured only by presence/residency in country for a period exceeding 6 months in any given tax year.

My friend has not left Cambodia for the past 3 years since the beginning of 2020... But if his job starts at the beginning of the tax year, i.e.:: January? ...then maybe he still doesn't qualify!? Lol...

As you say, one should check the contract...

I doubt if there is any government documentation online that states this rule at all clearly ... Like when does the tax year commence?

----

Why not let your friend contact one of the larger accountancy firms? They can answer all his specific questions with a certainty this forum can't offer unless someone has recently been in the same situation and found it all out.
Most large accountancy firms will give you a free 'welcome meeting' for 15-30 minutes so it's not very costly to find the correct legal answers.

Post by **Freightdog** » Wed Apr 26, 2023 5:40 pm

Kammekor wrote: ↑Wed Jan 04, 2023 1:26 pm Why not let your friend contact one of the larger accountancy firms? They can answer all his specific questions with a certainty this forum can't offer unless someone has recently been in the same situation and found it all out.
Most large accountancy firms will give you a free 'welcome meeting' for 15-30 minutes so it's not very costly to find the correct legal answers.

Would you have any names or details of such firms that are reputable and reliable?

Darkcel · Post by **Darkcel** » Wed Apr 26, 2023 6:11 pm

Your company should pay tax for you or you should at least be making enough that 20% means didly squat

Bluenose · Post by **Bluenose** » Wed Apr 26, 2023 6:17 pm

Freightdog wrote: ↑Wed Apr 26, 2023 5:40 pm
Kammekor wrote: ↑Wed Jan 04, 2023 1:26 pm Why not let your friend contact one of the larger accountancy firms? They can answer all his specific questions with a certainty this forum can't offer unless someone has recently been in the same situation and found it all out.
Most large accountancy firms will give you a free 'welcome meeting' for 15-30 minutes so it's not very costly to find the correct legal answers.

Would you have any names or details of such firms that are reputable and reliable?

PwC and KPMG are both present here

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