Working and paying taxes in Cambodia for a foreign company

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hmph
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Working and paying taxes in Cambodia for a foreign company

Post by hmph » Wed Jan 22, 2020 8:24 am

This is a bit of a special case that I'm unable to find any information for. I'm looking into the possibility of living, working and paying taxes in Cambodia, but being employed by and EU company and getting paid salary into an EU bank account.

The company I work for will not be helping me with a work permit nor will they pay my taxes. Would that be treated as self-employment? I read a bit about that, and it seemed complicated enough as it is. This seems to add another layer of complexity as I do work for a company, but it's not Cambodian.

Ideally, I would apply for an EB-visa, then a work permit, then go and register myself at the tax office, sign up for that bank that allows you to pay your taxes online and then pay it monthly. But is it really that simple? Anyone here had any similar experience?
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Kammekor
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Re: Working and paying taxes in Cambodia for a foreign company

Post by Kammekor » Wed Jan 22, 2020 8:37 am

You have two options:

Option one: play the game legally. You will soon be lost in Cambodian bureaucracy and incompetency and the risk of failure is massive. Cambodian laws are not designed for situations like yours.

In this case:
Taxes: it depends on the agreements between your home country and Cambodia.
Worst case: you pay tax twice.
Best case: you don't pay tax anywhere.

Work permit:
You probably won't get one.

Option two: play the don't know don't care card.
Come, do what you need to, and stay using EG visa. You'll need to leave the country every 7 months (or sooner depending on the EG visa you choose). You won't pay any tax here. No work permit.
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Duncan
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Re: Working and paying taxes in Cambodia for a foreign company

Post by Duncan » Wed Jan 22, 2020 8:56 am

Kammekor wrote:
Wed Jan 22, 2020 8:37 am
You have two options:

Option one: play the game legally. You will soon be lost in Cambodian bureaucracy and incompetency and the risk of failure is massive. Cambodian laws are not designed for situations like yours.

In this case:
Taxes: it depends on the agreements between your home country and Cambodia.
Worst case: you pay tax twice.
Best case: you don't pay tax anywhere.

Work permit:
You probably won't get one.

Option two: play the don't know don't care card.
Come, do what you need to, and stay using EG visa. You'll need to leave the country every 7 months (or sooner depending on the EG visa you choose). You won't pay any tax here. No work permit.
Sounds good to some people. But best to put the money that you should be paying in taxes, into a special savings account and be prepared to hand it over to those that require it one day.
Cambodia,,,, Don't fall in love with her.
Like the spoilt child she is, she will not be happy till she destroys herself from within and breaks your heart.
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Kammekor
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Re: Working and paying taxes in Cambodia for a foreign company

Post by Kammekor » Wed Jan 22, 2020 9:10 am

True. OP, if you want to be sure, visit one of the trustworthy accountants in Phnom Penh and pay them to find out what's the situation in your specific case. They did so for me 10 years ago and it worked out fine so far.

Unless you come up with more specific details and there's someone in Cambodia from your country in the same situation you'll most likely won't get a specific answer here.
starkmonster
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Re: Working and paying taxes in Cambodia for a foreign company

Post by starkmonster » Wed Jan 22, 2020 10:52 am

Cambodia has salary tax, the collection and payment of which is the responsibility of the employer, not the employee. Cambodia does not have income tax.

Salary tax can only be withheld/paid by Cambodian registered companies/organisations.

So your employer has no tax liability on that salary and neither do you. The downside is that you won't get a work permit and a visa.

Income tax is in the pipeline however, so expect to pay tax on that salary in the future if you are a tax resident of Cambodia.
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Bitte_Kein_Lexus
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Re: Working and paying taxes in Cambodia for a foreign company

Post by Bitte_Kein_Lexus » Wed Jan 22, 2020 5:51 pm

Screw paying local taxes if you're paid in a EU bank account. Even if you tried it would be a nightmare. As mentioned, just renew visas and that's it.
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Re: Working and paying taxes in Cambodia for a foreign company

Post by Mishmash » Wed Jan 22, 2020 7:02 pm

The laws are quite clear and contained in many booklets produced by firms such as KPMG.

They are also available in the Official English Translations to download and peruse.

As you are resident here, you will need to comply with Cambodian Law, and if you are working then you need the correct Visa, Residency and Work Permit.

To be legal the EU company must set up a Branch Office.

Otherwise you must set up a company yourself and contract with the EU firm, pay all relevant local taxes etc etc.

Freelance AKA self-employment or 'online' or any other term requires at least a sole proprietorship company.

All the rest are illegal ways to cheat Cambodia same as in any other country by avoiding tax.

The choice is obviously yours, consequences are yours.
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Re: Working and paying taxes in Cambodia for a foreign company

Post by xandreu » Wed Jan 22, 2020 7:25 pm

I was interested to Google how many tax evasion cases are successfully prosecuted in Cambodia per year, but couldn't find much info about it. Not sure if that means 'not many' or it's simply not recorded (or I didn't search hard enough).

I did find this during my search that you might find interesting. It's from 2018 so should still be pretty up to date.

https://www.pwc.com/kh/en/tax/cambodian ... oklet1.pdf
hmph
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Re: Working and paying taxes in Cambodia for a foreign company

Post by hmph » Wed Jan 22, 2020 7:44 pm

My country does not have any tax agreement with Cambodia. I'm not concerned about legal problems in Cambodia. I'm concerned about my country's tax authorities who I assume will eventually ask for proof of tax payment in Cambodia.

I've read that information from both PWC and KPMG. The law seems clear to me too. What isn't clear is how to go about getting the work permit.

I've thought about setting up my own company here too and work as a consultant, which seems a lot easier. That's definitely an option but something I would have to discuss with the company.
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Re: Working and paying taxes in Cambodia for a foreign company

Post by rogerrabbit » Wed Jan 22, 2020 7:57 pm

I take it that you are not really working in Cambodia? You just happen to live in Cambodia but you work remotely? Otherwise I don't really see why your employer is not willing to set up branch here if they are doing business here.
hmph wrote:
Wed Jan 22, 2020 7:44 pm
My country does not have any tax agreement with Cambodia. I'm not concerned about legal problems in Cambodia. I'm concerned about my country's tax authorities who I assume will eventually ask for proof of tax payment in Cambodia.

I've read that information from both PWC and KPMG. The law seems clear to me too. What isn't clear is how to go about getting the work permit.

I've thought about setting up my own company here too and work as a consultant, which seems a lot easier. That's definitely an option but something I would have to discuss with the company.
Do you have to move officially here? Cannot you just keep your address in your home country and pay taxes there normally?
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