Legal and Tax Updates

Issue: No. 00P/25P – 15 January 2025

On 31 December 2024, the Ministry of Economic and Finance issued a Prakas No. 1000 MEF.BrK.GDT on the Exemption of Special Tax on Domestic Cement Product as the Burden of State (the “Prakas”).

This Prakas aims to provide a 5% special tax exemption on the domestic cement production to support the sector, which has been severely impacted by the ongoing decrease in the real estate and construction industries since the outbreak of Covid-19 and the consequences of the global economic crisis.

The exemption will last for 2 years, commencing from 2025 until the end of 2026.

During this exemption period, all cement manufacturing enterprises are obligated to:

• Submit monthly and annual tax declarations, including taxes, which are considered the burden of the state through the e-filling system of the General Department of Taxation;
• To record and maintain accounting documents and information related to its business activities in accordance with the existing laws and regulations on taxation;
• Increase training and impart knowledge and technology to local employees in order to contribute to human resource development;
• Shall properly perform obligations to the state, such as the payment of other taxes, mineral tribute, and environmental and social funds; and
• Preparing an annual report for the Ministry of Economy and Finance on capital expenditure, manufacturing capacity, raw material consumption, training and knowledge transfer to local employees, and social work participation.

This policy is part of the government’s efforts to stabilize the cement production sector, which plays a crucial role in the construction and infrastructure development in Cambodia.

Disclaimer

The article is merely for general information purposes. It does not constitute a legal advice on the subject matter. If you have any questions or need any assistance, please feel free to contact us:

	NOEUM Sokvichhai, Partner, Managing Director sokvichhai.noeum@sithisak-lawoffice.com +855 12 826 785	Mr. Sokvichhai has more than 8 years of experiences in labour, corporate, commercial and investment advisory in Cambodia. He actively advices and assists various businesses in commercial, tax, and labour registration, business licensing, products registration & distribution, business recapitalization & restructuring, and mergers & acquisitions transaction. He also has particular experiences in advising collective investment fund and trust business, initial public offering, bond issuance, investment incentives & qualified investment project, and labour & employment related issues. Sokvichhai also assists major business in preparing various complex commercial agreements.
	Dr. CHHAK Limchheang, Partner, Head of Real Estate and Construction Practice Group limchheang.chhak@sithisak-lawoffice.com +855 89 813 160	He has several years of professional experiences in real estate-related transaction and construction sector in Cambodia. He has advised local and foreign clients on acquisition and disposal of residential, industrial and commercial properties, on commercial lease, factory perpetual lease, real estate joint venture development and FIDIC agreements. Recently, he led counsel to advise on both real estate and tax issues of real estate development project with an approximate investment portfolio of USD 40 million in Kampot Province. He is currently leading a legal counsel to advise a major domestic company in their joint venture property development with an investment portfolio nearly USD 200 million in Phnom Penh.

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