Sector: Taxation

On April 29, 2025, the General Department of Taxation (“GDT”) announced Clarification No. 12779 on tax audits to be conducted under the manual on tax audit methods and procedures, also referred to as the “Tax Audit SOPs.”

The GDT will conduct tax audits of 4,827 companies throughout 2025. In accordance with established protocol, each selected company will receive a formal tax audit notice from the GDT. This notice will outline the necessary preparations and the expectations for cooperation with the tax administration during the audit process.

Furthermore, the GDT has clarified that, based on the principles outlined in the Tax Audit SOPs, a company will generally be subject to an on-site audit only once in a three-year period. This limitation does not apply if the entity is found to be at risk or has irregularities.

On February 19, 2025, the General Department of Taxation (“GDT”) released Notification No. 5524 GDT on the official market interest rates for loans between related parties for the year 2024.

To determine these rates, the GDT calculated the average annual lending interest rates of 12 major Cambodian commercial banks.

The resulting official interest rates are as follows:

• 9.67% per year for loans in Cambodian riel
• 8.79% per year for loans in US dollars

As mentioned above, note that these specific interest rates apply only to loans made between related parties.

Introduction

Tax stability is essential for fostering cross-border investment, yet fiscal policy disputes can quickly escalate into international conflicts—a challenge that resonates both in South America and Southeast Asia. The Freeport-McMoRan v. Peru decision, rendered on 17 May, 2024, under the United States of America-Peru Trade Promotion Agreement (TPA), offers valuable insights for emerging economies like Cambodia.

As nations in Southeast Asia modernize their tax regimes to attract foreign investment, the Tribunal’s reasoning in this case provides a practical roadmap for balancing investor protections with the sovereign right to enforce domestic tax policies.

Case Overview

The dispute arose when Freeport-McMoRan Inc. (“Freeport”), a U.S.-based company holding a 53.56% stake in the Peruvian mining company Sociedad Minera Cerro Verde S.A.A. (“SMCV”), challenged Peru’s imposition of additional royalties and taxes. These fiscal measures were introduced after Peru enacted the 2004 Mining Royalty Law in response to rising copper prices, despite a 1998 Stability Agreement that had guaranteed fiscal and administrative stability for a major $237 million investment project until 2013. As Peru’s tax authority began assessing unpaid royalties and taxes from 2008 onward, Freeport argued that these enforcement actions breached both the Stability Agreement and the minimum standard of treatment guaranteed under the TPA.

Central to the dispute was the question of whether the penalties and interest imposed on unpaid taxes qualified as “taxation measures” under Article 22.3.1 of the TPA—thus excluding them from the Tribunal’s jurisdiction.

Claimant’s Allegations on Taxation Measures

Freeport argued that the penalties and interest imposed by Peru’s tax authority, on unpaid tax assessments against SMCV were not “taxation measures” as defined under Article 22.3.1 of the TPA.

According to Freeport, the term “taxation measures” applies only to obligations directly classified as taxes under Peruvian law, such as income taxes, contributions, or fees, and does not extend to penalties or interest. Freeport contended that penalties and interest are separate obligations intended to penalize or compensate for delayed payments, not taxes themselves. As such, Freeport maintained that these measures should not fall within the TPA’s tax carve-out and are subject to the Tribunal’s jurisdiction under Article 10.5, which ensures fair and equitable treatment.[1]

Respondent’s Defense on Taxation Measures

Peru, on the other hand, defended its fiscal measures by asserting that the penalties and interest imposed on SMCV for unpaid tax assessments are integral to its domestic taxation regime and thus qualify as “taxation measures” excluded from the scope of Article 10.5 of the TPA under Article 22.3.1.[2] The government underscored that the TPA defines “measures” broadly to include “any law, regulation, procedure, requirement, or practice” related to taxation. It argued that if the TPA’s drafters had intended to limit the carve-out solely to “taxes,” as Freeport suggested, Article 22.3.1 would have explicitly referred to “taxes” rather than the broader term “taxation measures.”[3] Peru argues that Freeport’s interpretation artificially limits the scope of this term.

Additionally, Peru highlighted that the TPA explicitly safeguards states’ sovereign authority to enforce tax measures, including penalties and interest, emphasizing that such measures are “taxation measures” because they “…(i) constitutes a measure for the enforcement of taxes, (ii) is a practice related to taxation, and (iii) is a measure related to taxation.”[4] Based on this reasoning, Peru maintained that the Tribunal lacked jurisdiction to consider Freeport’s claims regarding these measures.

Tribunal’s Decision on Taxation Measures

Ultimately, the Tribunal sided with Peru, concluding that Article 22.3.1 of the TPA barred Freeport’s Article 10.5 claims concerning penalties and interest on the Tax Assessments, concluding they were “taxation measures” outside its jurisdiction. It found that Article 22.3.1 broadly excludes taxation measures, with no applicable exceptions under Article 22.3.[5] Rejecting Freeport’s reliance on Peruvian law, the Tribunal interpreted “taxation measures” through international law under the Vienna Convention on the Law of Treaties, emphasizing the TPA’s broad definition of “measure” as “any law, regulation, procedure, or practice”.[6]

Further, the Tribunal agreed with prior jurisprudence[7] that “taxation” encompasses enforcement mechanisms, including penalties and interest, which are integral to a state’s tax regime.[8] Finally, the Tribunal agrees with the Murphy v. Ecuador tribunal’s finding, which considered that the purpose of the tax carve-out in the underlying treaty is to “preserve the States’ sovereignty in relation to their power to impose taxes in their territory.” It concluded that the penalties and interest fell under Peru’s domestic tax system and were excluded from the Tribunal’s jurisdiction.[9]

Implications for Southeast Asia: Stability, Sovereignty, and Systemic Gaps

For Cambodia and other Southeast Asian economies, the Freeport-McMoRan v. Peru decision carries profound implications. As these nations work to boost their attractiveness to foreign investors while simultaneously reforming their tax systems, this case serves as a cautionary tale. It highlights the challenges faced by low- and middle-income states—whether in South America or Southeast Asia—that often lack robust administrative frameworks to efficiently resolve complex tax disputes.

In the context of Cambodia’s evolving fiscal landscape, including reforms like the 2023 Law on Taxation, clarity in economic concessions, the structuring of qualified investment project agreements, and precise treaty drafting becomes essential. These measures can help prevent the ambiguities and uncertainties that lead to costly arbitrations. As cross-border investment continues to grow, proactive legal strategies will be key in balancing the drive for economic growth with the need to maintain fiscal sovereignty.

About Us:

With offices across Cambodia, Myanmar, Vietnam, Laos, and Bangladesh, our team specializes in resolving cross-border structuring and tax disputes. We leverage regional expertise and global treaty insights to safeguard client interests, ensuring that our solutions are both innovative and attuned to local regulatory landscapes.

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With the updated transfer pricing (“TP”) regulations that were issued by the Ministry of Economy and Finance via Prakas No. 574 on September 19, 2024 (“Prakas 574”) entering into effect on January 1, 2025 (and the abrogation of the prior regulations under Prakas No. 986), we take a look at what this means for taxpayers, particularly in terms of the TP documentation requirements.

1. TP documentation can be reused

Article 17 of Prakas 574 introduces a provision that allows taxpayers to reuse their TP documentation from the previous tax year provided there have been no significant changes in the controlled transactions and comparability factors that would affect the TP methodology used. The only update required is the annual revision of financial indicators for comparables.

In essence, instead of preparing new TP documentation each year from the ground up, taxpayers can reuse the prior year’s documentation, as long as core factors, such as intercompany transactions and comparability conditions, remain unchanged. By requiring only updates to the financial indicators for comparables, rather than a complete overhaul of TP documentation, this provision substantially alleviates the administrative burden on taxpayers.

2. Exemption from TP documentation obligation

As outlined in Paragraph 2, Article 17 of Prakas 574, Cambodian taxpayers are exempt from the obligation to prepare TP documentation for a tax year if they meet both of the following criteria for that year:

• The annual turnover is less than KHR8 billion (approximately US$2 million) and total assets are valued at less than KHR4 billion (approximately US$1 million); and
• The total value of all controlled transactions except loan transactions is less than KHR1 billion (approximately US$250,000).

For businesses that fall within these thresholds, the requirement to prepare comprehensive TP documentation is waived. This provision particularly benefits smaller enterprises or those with limited cross-border transactions, while enabling the tax authorities to focus their resources on larger, more complex transactions.

3. Exemption for intercompany loans

Prakas 574 maintains the exemption on loan transactions from related parties having to comply with the arm’s length principle if taxpayers can provide the supporting loan documents specified under Notification No. 10979 GDT.

In addition, Prakas 574 further simplifies the compliance process for certain businesses by allowing resident taxpayers that are not banks or financial institutions to bypass the need for detailed supporting loan documentation if they are one of the following:

• An enterprise that has been incorporated for less than three taxable years, counting from the date of tax registration.
• A single-member private limited company that enters into a loan transaction with a shareholder, with a loan balance for any period of less than KHR3 billion (approximately US$750,000).
• A sole proprietorship with a loan from the owner, spouse, or dependent children.

4. Other important notes

Arm’s length range

Cambodia’s approach to TP, as outlined in the Article 7 of Prakas 574, presents a relatively straightforward and taxpayer-friendly method of ensuring compliance with the arm’s length principle. Under this rule, no TP adjustments are made if the financial indicators for controlled transactions fall within the arm’s length range, provided the appropriate TP method is used. However, if the financial indicators fall outside this range, the transfer price must be adjusted to the median of the arm’s length range, with the caveat that such an adjustment must not lead to a tax reduction or tax loss.

Attribution of profits to a permanent establishment

If a non-resident taxpayer has a permanent establishment (“PE”) in Cambodia, the taxpayer must allocate gross income, any deductible amount, or other benefits in a manner that properly reflects the income between the PE and the non-resident taxpayer. The taxable income allocated to the PE and the non-resident taxpayer is then treated as the taxable income of two separate and independent enterprises. This ensures that income is taxed where it is economically generated and in accordance with the activities carried out by the PE in Cambodia.

Cambodia’s profit attribution rules for PEs are broadly consistent with the OECD’s general framework, ensuring that profits are attributed based on the economic activities performed by the PE. Compared to neighboring countries, Cambodia’s rules appear simpler and more flexible, which may benefit businesses seeking a less complex PE tax regime, but it also means that businesses may need to take extra care in ensuring their income allocation is fully compliant with international standards, especially when operating in multiple jurisdictions with more stringent rules.

TP adjustment – Primary vs secondary adjustment

The introduction of primary and secondary adjustments in Cambodia’s new TP regulations marks a significant step in aligning the country’s tax framework with international standards, particularly those outlined by the OECD Guidelines. This change is designed to mitigate base erosion and profit shifting, and enhance tax compliance among multinational enterprises (“MNEs”) operating in the country.

• Primary adjustment refers to an initial adjustment made by the tax administration of the taxpayer’s taxable income as a result of applying the arm’s length principle to transactions between the taxpayer and related parties. This means that if the tax authorities find that a taxpayer has underreported income or overreported expenses in related party transactions, a primary adjustment will be made to correct the reported taxable income.
• Secondary adjustment refers to an adjustment that arises from imposing tax as a result of a primary adjustment. Secondary transactions may take the form of constructive dividends, equity contributions, or loans. Secondary adjustments ensure that any excess profits or adjustments made during the primary adjustment process are properly accounted for in the financial transactions between related entities.

For MNEs operating in Cambodia, the adoption of primary and secondary adjustments introduces a layer of complexity to their TP documentation and compliance obligations. MNEs will now need to ensure that intercompany transactions are priced in accordance with the arm’s length principle to avoid the potential for primary adjustments. The risk of secondary adjustments further underscores the importance of maintaining robust TP documentation to support the pricing of related party transactions.

In April 2024, the General Department of Taxation (“GDT”) of Cambodia introduced its long-awaited Manual on the Methods and Procedures of Tax Audits, also referred to as the “Tax Audit SOPs.” This comprehensive document includes updated guidelines for tax audit procedures and aims to enhance the effectiveness and transparency of tax audits.

Currently, the GDT conducts approximately 4,000 tax audits annually, with some audits extending over multiple years due to their complexity. The introduction of the Tax Audit SOPs represents a significant step in the GDT’s efforts to reform and streamline tax audit procedures across the Kingdom.

In this article, we provide a clear and insightful analysis of the recently released Tax Audit SOPs. We will explore the key changes introduced, their practical implications for businesses, and what companies can expect moving forward.

Background: Rising Audit Activity Creates Pressure on Businesses

Before diving into the specifics of the new Tax Audit SOPs, it’s crucial to understand the evolving tax audit landscape through some pertinent statistics:

• Sharp increase in audits: Since 2018, the number of tax audits conducted by the Department of Large Taxpayers and the Department of Enterprise Audit has skyrocketed, rising from 907 to 3,883 in 2021, a staggering increase of 336%.
• Limited resources: While the number of audits has grown significantly, the number of tax auditors has only modestly increased, from 742 in 2018 to 746 in 2021. This highlights the growing pressure on existing resources.
• Focus on large taxpayers: Large taxpayers, estimated at about 4,000 and contributing 80% of the total tax collection, are a primary target of audits.
• Growing revenue from audits: In 2019, tax audit revenue contributed approximately 28% of the total tax collection, showcasing the significant role tax audits play in boosting government revenue.
• Limited success of appeals: Despite a growing number of tax audits, the appeal process remains largely ineffective. Annually, approximately 200 appeals are lodged with the Committee for Tax Arbitration under the Ministry of Economy and Finance, but only 50 of these cases are resolved. This low-resolution rate may discourage businesses from contesting tax reassessments.

These statistics paint a clear picture of the increasing challenges businesses are facing, with more frequent, less efficient tax audits, making the potential for a more streamlined and less time-consuming audit process welcome.

Key change #1: Gold Taxpayers Exempt from Routine Tax Audits

The new Tax Audit SOPs introduce a significant benefit for taxpayers with a gold taxpayer compliance certificate, exempting them from all tax audits while their certificate is valid, unless a risk or irregularity is detected.

This is a notable enhancement to the benefits of achieving gold taxpayer status. Previously, under Circular 007 MEF of 2017, gold taxpayers were subject to only one comprehensive audit every two years and were exempt from limited and desk audits, unless requested by the taxpayer.

A risk or irregularity refers to potential issues identified by the GDT before initiating an on-site audit. The GDT employs various methods to assess taxpayer risk and potential irregularities, which could include reviewing a company’s tax return filing history, economic activities, and accounting systems. According to the Tax Audit SOPs, risk indicators or irregularities include things such as frequent low tax payments, extended periods without tax payments, frequent changes or invalidations of invoices, significant year-to-year fluctuations in profit margins, discrepancies in financial statements, irregularities in debt affordability and repayment capacity, and deviations in profitability compared to similar businesses within the same industry.

While the Tax Audit SOPs provide a framework for identifying risks, how the exemption for gold taxpayers applies in practice may vary. Here’s why:

• Lack of specific guidance: The Tax Audit SOPs do not provide sufficiently detailed guidance on how the GDT assesses risk and determines the necessity for an audit on a gold taxpayer. This lack of clarity could lead to inconsistencies in application.
• Discretionary power: The SOP grants the GDT some level of discretion in initiating audits based on perceived risks. This could potentially lead to situations where compliant gold taxpayers face unexpected audits, creating uncertainty.

Despite these potential ambiguities, the new Tax Audit SOPs is a positive step towards a more streamlined and risk-based approach to tax audits in Cambodia. For businesses seeking to benefit from the gold taxpayer exemption, maintaining strong internal controls, accurate financial reporting, and a consistent tax filing history will be crucial in minimizing perceived risks by the GDT.

Other benefits of a gold tax compliance certificate

Achieving gold taxpayer status offers substantial advantages beyond exemption from routine tax audits. One key advantage is the streamlined Value Added Tax (“VAT”) refund process. According to Circular 007 MEF, gold taxpayers are entitled to receive VAT refunds for amounts of less than KHR500 million without undergoing a separate VAT audit. Additionally, gold taxpayers can apply in writing to be exempt from minimal tax payments.

Obtaining the two-year gold taxpayer compliance certificate involves submitting a written application to the GDT. The processing timeline typically ranges from one to two months.

Key Change #2: A Streamlined Desk Audit Process

Previously, desk audits could be lengthy and culminate in a Notice of Tax Reassessment (“NOTR”). The new Tax Audit SOPs introduce a significant change, transforming them into a more efficient and less time-consuming process focused on self-correction by taxpayers.

Steps in the new process

1. First notice: The GDT initiates the process by issuing a letter outlining discrepancies found between the taxpayer’s information and their records. This is not a NOTR, but rather an opportunity for self-assessment.
   • Taxpayers have 30 working days to correct identified issues and remit any additional tax owed. Crucially, any tax paid within this period is exempt from interest charges. However, the Tax Audit SOPs are silent on penalty exemptions. This implies that penalties may still apply to any unpaid tax, even if paid within the 30-day rectification period.
   • If the taxpayer disagrees with the identified discrepancies, they can submit a written response to the GDT within the same 30-working-day window, explaining their position. The GDT will then review and respond within 30 working days, either accepting or rejecting the explanation. If rejected, the taxpayer has the right to formally appeal.
2. Second notice: If the taxpayer fails to comply or resolve the issues within 30 working days of the first notice, a second notice is sent. The taxpayer must correct the issues and pay any additional tax within another 30 working days. Unlike the first notice, adjustments at this stage will include interest charges.
   • Taxpayers can still object within working 30 working days, and the GDT will respond accordingly. A rejection of the taxpayer’s explanation can be formally appealed.
3. Final step: on-site audit: Should the taxpayer remain non-compliant or the issues remain unresolved after 30 working days from the second notice, the process escalates to an on-site audit. This could evolve into a limited or comprehensive audit, depending on the findings.

While the new desk audit process aims to be faster by promoting taxpayers’ self-correction and reducing the need for lengthy audits, there are some potential drawbacks to consider. The tight 30-working-day window for responding to the first notice, while offering an opportunity to avoid interest charges, puts pressure on businesses to resolve discrepancies quickly. Additionally, the possibility for the process to escalate to a full audit after the first notice raises questions about its true efficiency in all cases.

Less New: Combined Audits – Avoiding Repetition

The Tax Audit SOPs address a common concern for taxpayers facing multiple tax audits, often with overlapping tax years. To streamline the process and avoid repetition, they allow the General Director of the GDT to authorize combined audits involving subordinate units.

What’s not new

This concept isn’t entirely new, as Article 8(4) of Prakas 270 MoEF.BrK (“Prakas 270”) already stipulates that: “In any special case, the General Director of the General Department of Taxation may allow a unit or multiple units to conduct a joint audit on the enterprise.” What constitutes a “special case” remains somewhat ambiguous, but the Tax Audit SOPs offer some clarity, suggesting that combined audits are intended to prevent repeated and overlapping tax audits.

Uncertainties remain

Key questions remain unanswered:

• Automatic vs. application-based: The specifics of when and how the GDT will combine audits remain unclear. It is not specified whether the process is initiated automatically by the GDT or if a taxpayer must submit an application.
• Potential for internal conflict: In practice, internal conflicts of interest between departments can arise. For example, in some cases, auditors conducting a limited audit might be motivated to issue an NOTR prematurely. This could be done strategically to keep the audit case within their department and avoid losing it to the team responsible for comprehensive audits. This raises a valid question: why conduct multiple overlapping audits when a single, comprehensive audit could address all potential issues?

Our experience with combined audits

In practice, taxpayers typically initiate combined audits by submitting written applications, which are often approved by lower-level GDT officials rather than requiring the General Director’s direct involvement.

Furthermore, combining audits doesn’t necessarily translate to a less comprehensive review. For instance, combining a limited audit with a comprehensive audit still results in a comprehensive audit, potentially involving auditors from various branches, like the DLT collaborating with the DEA.

In summary, while the concept of combining tax audits sounds appealing to streamline audits, the specific procedures and potential interdepartmental dynamics add layers of complexity that warrant careful consideration to apply for combining audits.

New Time Limits for Tax Audits, But Not That New

The Tax Audit SOPs introduce time limits for tax audits, but they are essentially an extension of existing regulations with some nuances.

Desk audits

The Tax Audit SOPs specify that desk audits must be completed within 12 months from the date the tax return is filed. For instance, if a taxpayer files their return on 31 March 2023, if a desk audit is initiated in September 2023, it must be completed by 31 March 2024.

On-site audits

The Tax Audit SOPs suggest a timeframe of one to six months for on-site audits (limited and comprehensive audit), with completion by the first quarter of the following year. This applies even if no irregularities or taxpayer errors are found during the audit.

For comparison, the Prakas 270, Article 9(7) established similar durations: three months for desk and limited audits, and six months for comprehensive audits.

Conditions and challenges

While these time limits seemingly offering a more predictable timeline, a closer look reveals a significant challenge: these deadlines hinge on the cooperation of the taxpayer to promptly provide “sufficient” documents and information. Unfortunately, neither the Tax Audit SOPs nor Prakas 270 defines what constitutes “sufficient” in this context.

This ambiguity creates a situation where audits can become open-ended. Without clear standards for evidence, the GDT could continually request additional documents, potentially extending the audit process well beyond the stated time limits. This lack of clarity has been a primary contributor to the protracted audit periods frequently endured by taxpayers.

Other New Aspects to Know

Beyond the streamlined desk audit process and exemption for gold taxpayers from routine audits, the Tax Audit SOPs introduce other significant changes.

Reduced documentation burden

The Tax Audit SOPs aim to reduce the documentation burden on taxpayers by stipulating that the audit department should utilize documents and information already provided during tax registration and filing, minimizing duplicate requests. However, the GDT retains the right to request additional documents if deemed necessary. Importantly, the Tax Audit SOPs mandate that the GDT maintain and share these additional documents with other relevant authorities to avoid future duplication.

Enhanced records and transparency

The Tax Audit SOPs emphasize the importance of recordkeeping and transparency during audits. Tax auditors are now required to document all verification of accounting records and taxpayer interviews. These records must be signed and stamped by the taxpayer or their representative. While this is likely already happening in many cases, the Tax Audit SOPs formalize the requirement, providing greater transparency for taxpayers.

Clarification of deadlines

The Tax Audit SOPs provide greater clarity on timelines. This applies to both GDT responses (e.g. decisions on taxpayer protests) and taxpayer responses (e.g. corrections and payments, written requests, protests). Previously stated deadlines of “60 days” are now clarified as “within 60 working days,” and “30 days” are clarified as “within 30 working days.” This distinction is important for taxpayers in accurately calculating response windows.

Conclusion

The new Tax Audit SOPs in Cambodia present both opportunities and challenges for businesses. The gold taxpayer exemption offers eligible businesses the advantage of avoiding routine audits. Additionally, all taxpayers can benefit from a streamlined desk audit process featuring a two-strike system, which allows businesses to promptly address discrepancies and potentially avoid interest charges. The Tax Audit SOPs also enhance clarity on deadlines and seek to reduce the documentation burden by utilizing information already provided during tax registration and filing.

However, uncertainties remain regarding the practical implementation of these reforms, particularly in terms of whether tax audits will indeed be streamlined and how the standards for “sufficient” documentation will be defined.

Navigating these reforms requires careful consideration and expert guidance. At Andersen in Cambodia, we specialize in helping businesses adapt to regulatory changes, optimize tax strategies, and ensure compliance with the latest legal requirements. Get in touch with us today to learn more.

On 23 July 2024, the General Department of Taxation (“GDT”) held a workshop Standard Operating Procedures (“SOP”) for Tax Audit and Tax Crime Investigation. The workshop featured prominent speakers, including H.E. Mr. Kong Vibol, Director General of the GDT, Neak Oknha Kith Meng, President of the Cambodian Chamber of Commerce, and Mr. Edwin Vanderbruggen, Senior Partner at Andersen in Cambodia.

The event aimed to ensure efficient tax audit procedures, the ethics of the tax auditors, and full compliance of tax crime investigations with the Criminal Procedure Code of Cambodia.

Key discussions and insights

1. SOP of tax audit for tax officers & taxpayers

• To streamline the tax audits performed by the tax administration, the SOP outlines two main types: Desk Audit and Onsite Audit (“OA“). Desk Audit (“DA”) is conducted at the tax administration office and involve reviewing and verifying tax returns. Onsite Audit is divided into Limited Audit (“LA”) and Comprehensive Audit (“CA”), focus on different aspects and timelines of tax assessments.
• To avoid an overlapping tax audit, a joint audit (LA and CA) at once will be conducted since only one OA is allowed every three-years.
• If hard evidence of serious tax evasion exists, the Director General of GDT may appoint any competent tax audit department/unit to conduct tax audit or alternatively, the Tax Crimes Investigation Department to carry out the necessary tax crime investigation procedures.
• Taxpayers may request the GDT to conduct an onsite audit within the three-year period. However, if no risk or irregularities are found, the tax administration will not conduct any tax audit.
• The tax auditors may not request documents that the taxpayers have already provided (i.e., during tax registration, previous tax filings, etc.).

2. Remarks on Comparing Cambodia’s Tax Audits to International and Regional Best Practices (Edwin Vanderbruggen)

• In terms of tax revenue (% of GDP), Cambodia scores higher than most in Asia, even higher than several EU countries.
• While the number of tax audits in Cambodia is normal, the lengthy duration of these audits creates a backlog, leaving both taxpayers and the tax authority frustrated by the slow pace of resolution.
• Mr. Edwin encouraged taxpayers to obtain a gold tax compliance certificate. Approximately 300 taxpayers currently hold a gold tax compliance certificate.
• He also suggested some type of express arbitration to eliminate the backlog.

3. SOP manual on tax crime investigation for tax official and tax payers

Taxpayers who obtain a Gold Certificate of Tax Compliance will, generally, not be subjected to audits or crime investigations, but if risk factors occur some type of verification will nevertheless be done.

Additional key highlights

The seminar also highlighted the GDT’s initiatives to resolve the on-going dispute within the shipping and airline industry, alongside efforts to reinforce the tax court system, as mentioned by H.E. Mrs. Bun Neary, Deputy Director General of the GDT.