Professional Documents
Culture Documents
CAMBODIAN TAXATION
MOCK EXAM PAPER
ANSWERS
Page 1 of 11
Mock Exam
1)
1) (a)
EFG is required to pay ToP of USD 75,150 to the tax authority for the year ended 31 December 2012.
Working 1:
Accrued bonus not paid until April 2012 = USD 20,000 [USD 40,000 x 50% (amount to be paid in
April 2012)]
Working 2:
Donation = USD 1,500 [USD 5,000 (total donations made during the year) – USD 3,500 (charitable
contribution -> please refer to Working 4)]
Working 3
Tax depreciation
Historical
Depre- Tax
cost/Un- Cost of Depreciation
Class Addition ciation depre-
depreciated disposal base
rate ciation
value
Class 1 1,500,000 0 0 1,500,000 5% 75,000
Class 2 120,000 5,000 0 125,000 50% 62,500
Class 3 100,000 13,000 0 113,000 25% 28,250
Class 4 30,000 0 2,500 27,500 20% 5,500
171,250
Working 4: Further to Working 2, it was noted that there was a charitable contribution of USD
3,500 made to the Cambodia Red Cross. Therefore,
Working 5
Interest deduction calculation
USD USD
Interest income 15,000
Adjusted profit before interest 476,750
Add: Interest expense (2,500,000*6%) 150,000
Less: Interest income (15,000)
611,750
@50% 305,875
Page 3 of 11
Mock Exam
Working 6:
Withholding Tax Credit on non-fixed term deposit = USD 15,000 x 4% = USD 600
A deductible expense is a charge or expense which the taxpayer has paid or incurred in the tax
year to carry on the business and which does not cause the inclusion in the assets of a
property or the elimination from the liabilities of a debt. For the purposes of TOP, an expense
must also meet the 3 conditions as below to be deductible:
a- The facts determining the taxpayer's charge or expense have occurred: this means the
reality of the charge or expense is proven by verifiable evidence (invoice, bill of entry,
business letters,...).
b- The results of economic activities (or economic performance) with respect to that expense
have occurred.
c- The amount of the taxpayer's liability has been precisely determined: this means the
expense or charge must be recorded in the period; and must have proper proofs indicating
clearly its amount (invoice,...).
2)
2) (a)
USD Explanation
Basic salary 2,500 Basic salary falls within the definition of
“salary” that is a taxable salary (under
Page 4 of 11
Mock Exam
2) (b)
Mrs H
For the month of October 2013
Tax on Salary (ToS) calculation
USD Riel
Taxable salaries before rebate adjustment 5,380
Exchange rate, Riel per USD 4,000
In Riel 21,520,000
Less: rebate for the 2 children 150,000 *
Taxable amount in Riel 21,370,000
ToS liability:
*Note: The children are at primary school and this are qualified as dependents.
Page 5 of 11
Mock Exam
2) (c)
Mrs H
For the month of October 2013
Tax on Fringe Benefits (ToFB)
- Real refunds on professional expenses made by the employee under the assignment and for
the benefit of the employer and which satisfy the 3 following conditions:
a. made for the direct and exclusive interest of the enterprise;
b. not exaggerated nor extravagant,
c. supported by detailed invoices already paid and made in the name of the recipient of the
real expense refund.
- Indemnity for the layoff within the limit as provided in Labour Law.
- Additional remuneration with social characteristics where there is provision in Labour Law.
- Supply gratis or below acquisition cost of special uniforms or professional equipment
- Flat allowance for mission and travel expenses. This allowance should not overlap
the real expense refund provided in this article.
3). (a)
According to article 18 of the VAT Sub-decree, a taxable person can apply to the General
Department of Taxation (GDT) in writing for the cancellation of registration if that person has
ceased to make supplies of goods or services for consideration as part of their business
activities. Article 19 of the regulation stipulates that a taxable person can apply to the GDT in
writing to cancel his registration if:
With respect to the most recent period of three calendar months, the taxable turnover
does not exceed the registration threshold specified under paragraph 2 of article 2 of
the VAT Sub-decree, and
The taxable turnover for the previous twelve calendar months doe s not exceed 75% of
the annual registration threshold.
3).(b)
According to Article 68 of the Law on Taxation (LoT), in order to claim the input VAT on local
purchases and importations, the taxable person must fulfil the following conditions:
Goods and services shall be purchased for taxable sales or taxable su pplies of
services; or for use in producing taxable supplies by the taxable person;
Certified Customs Declaration of imported goods for input tax related to the imports;
The listed in the inventory shall be on hand at the effective date of registration
Page 6 of 11
Mock Exam
The Supply or import occurred not more than 60 days prior to the effective date of
registration.
Tax invoices for input tax related to domestic purchases from VAT registered
suppliers;
A claim shall be made in the form prescribed by GDT;
Clear and proper documentary evidence shall be produced to satisfy the GDT that
the taxable person has paid the tax which can be allowed as a credit.
3). (c)
Based on Article 64 of the LoT, a zero-rated supply is a taxable supply and subject to VAT at
the rate of 0%. Based on Article 57 (of the same law), a VAT-exempt supply/non-taxable
supply is a supply not subject to VAT.
VAT registered taxpayer that purchases goods (including capital assets) and services for
taxable sales or taxable supplies of services; or for use in producing taxable supplies
(including a zero-rated supply) can claim input VAT incurred in respect of such purchases.
However, input VAT cannot be claimed as a credit by a taxpayer that is a VAT -exempt supply
or non-taxable supply and subsequently, the input VAT becomes part of the cost of such
taxpayer.
3) (d)-1a
According to Article 49 (4) of the VAT sub-decree, where a taxable person (Highland Hotel)
has issued a tax invoice (the old invoice declared in Dec 2012) and the amount shown as tax
charged in that tax invoice exceeds the adjusted tax amount in respect of the supply, the
taxable person making the supply shall provide the recipient (the guest) with a credit note.
Therefore, the accountant has to issue a credit note in the total amount of USD440 inclusive
of VAT.
Credit note
Karaoke before VAT = USD400
VAT @ 10% (US400 x 10%) = USD 40
--------------
Total credit note inclusive of VAT = USD 440
3) (d)-1b
According to Article 49 (5) of the VAT sub-decree, where a taxable person has issued a tax
invoice (the old invoice declared in Nov 2012) and the amount shown as tax charged in that
tax invoice is less than the adjusted tax amount in respect of the supply, the taxable pers on
making the supply shall provide the recipient (Tour Agency Company) of the supply with a
debit note. Therefore, the accountant has to issue a Debit Note in the total amount of
USD1,100 inclusive of VAT (USD1,000 plus VAT 100).
Debit note
3) (d)2
Highland Hotel
Tax liabilities for December 2012
Page 7 of 11
Mock Exam
Revenues:
Food and non-alcoholic drinks, inclusive of VAT 5,280 5,280 /1.1 4,800 10% 480
Beer and wine, inclusive of PLT and VAT 2,970 2,970/1.1 2,700 10% 270
Cigarettes, inclusive of PLT and VAT 1,320 1,320 /1.1 1,200 10% 120
Debit note for Suite room in hotel inclusive of VAT 1,100 1,100 /1.1 1,000 10% 100
Non-alcoholic drinks, inclusive of VAT 13,750 13,750 /1.1 12,500 10% 1,250
New Projectors, inclusive of VAT 2,200 2,200 /1.1 2,000 10% 200
Revenues:
Beer and wine inclusive PLT 2,700 2,700 /1.03 2,621.36 3% 78.64
Total 113.59
Revenues:
Room services, inclusive of ACT but exclusive of
400,320 400,320/1.02 392,470.58 2% 7,849.41
VAT
Debit note for Suite room exclusive of VAT 1,000 1,000 /1.02 980.39 2% 19.61
Total 7,869.02
ST
Calculation of ST VAT Base Working ST Base ST
Rate
USD USD USD Rate USD
Revenues:
Prepayment of ToP
Total revenues, exclusive of VAT 412,170
Prepayment of ToP rate 1%
Prepayment of ToP liability 4,121.7
4) (a)
The types of payments exempt from WHT under Section 8.4 of the ToP Prakas are:
Interest payments made to a domestic bank, Savings institution or financial
institution;
Payments made to income-tax-exempt entities, as stated in Article 9 (new) of the
Law on Taxation;
Payments made to the government or governmental institution in respect of
royalties or the rental of movable or immovable property.
Salary payments made, which are covered by the Prakas on Tax on Salary;
Interest payments made by the government or a governmental institution to non -
resident on a loan that the government or the Ministry of Economy and Finance has
recognised or approved;
Page 9 of 11
Mock Exam
4(b).1
WHT due of ECC in September 2013
WHT is due when the payment is made. On 10 September 2013, USD$8,000 has been paid to
HT, therefore WHT (8,000x14%=USD$1,120) is due in September 2013 and tax payment has
to be paid by 15 th of October 2013.
4(b).2
WHT due of ECC in December 2013
According to sections 8.2 and 8.3 of Prakas ToP, any expense that is the subject of the
withholding tax that is recorded as expense in accounting book shall be treated as paid. 40%
of total consultant service (100,000 x 40%=USD$40,000) has been recorded as ECC’s
expense at the end of 2013, therefore WHT of (40,000 x 14%= USD$5,600) shall be applied
and the payment shall be made by 15 th January 2013.
Total 7,540,000,000
80%
6,032,000,000
Less 100,000,000
5,932,000,000
0.10%
5,932,000
Tax on Property to be paid for the year 2013 5,932,000
Page 10 of 11
Mock Exam
1. The tax administration shall provide a letter of notification for tax re-assessment to the
taxpayer.
2. The taxpayer has 30 days to answer the tax re-assessment to the office of the Tax
Department responsible for the tax re-assessment. Within that period, taxpayer can accept or
dispute the tax re-assessment. The taxpayer shall be considered to haveaccepted the tax re-
assessment if he fails to answer.
3. The office of the Tax Department responsible for the tax re-assessment shall forward the
results of the tax re-assessment to the tax collection office within a period of 30 days after the
issue of the letter of notification for tax re-assessment.
4. Where a taxpayer is not satisfied with the tax re-assessment or other decision made by the tax
administration, he/she can file a protest with the Director of the Tax Department. The protest
must be limited to facts or other information contained in the tax reassessment or the decision
or the procedures of the tax re-assessment.
5. The tax administration must issue a new decision within 60 days after the date the letter of
protest is received to confirm the correctness or incorrectness, in whole or in part, of the tax
assessment or other decision that the taxpayer disputes. The tax administration shall also
state the basis of this decision.
6. If the taxpayer does not accept this new decision of the tax administration he can file a letter of
protest to the Committee of Tax Arbitration within a period of 30 days.
7. The taxpayer has the right to appeal to the competent court against the decision of the
Committee of Tax Arbitration within a period of 30 days after receiving notification of that
decision. The taxpayer must deposit in the national treasury an amount of money equal to the
taxes, additional taxes, and interest under dispute and as assessed by the tax administration
before filing the appeal to the court.
Page 11 of 11