On 17 August 2026, the General Department of Taxation (GDT) issued Instruction No. [Reference Number] regarding the treatment of non-supply transactions for taxable services under the Value Added Tax (VAT) Law. This instruction clarifies the definition and scope of activities that do not constitute a “supply” for VAT purposes, addressing long-standing ambiguities in the interpretation of Article 9 of the VAT Law and related Prakas. The guidance is effective immediately and applies to all VAT-registered taxpayers providing services in Cambodia.
Key Takeaways
- Clear Definition of Non-Supply: The instruction explicitly lists transactions considered non-supply, including pure agent services, employee services under employment contracts, and certain intra-group cost recharges without markup, providing certainty for service providers in sectors like consulting, management, and financial services.
- VAT Recovery Implications: Taxpayers must distinguish between non-supply (no VAT charged, no input VAT deduction) and exempt supply (no VAT charged but input VAT may be restricted), with the instruction providing a decision flowchart to ensure correct VAT treatment and avoid erroneous credit claims.
- Compliance and Documentation Requirements: The GDT mandates that taxpayers maintain detailed records substantiating the non-supply classification, including contractual agreements and invoicing practices, subject to verification during tax audits.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement