On 13 March 2019, the Ministry of Economy and Finance (“MEF”) issued Prakas 270 on Tax Audits (“Prakas 270”), which attempts to improve the audit procedures to ensure transparency in paying taxes and increasing competitive environment in a fair manner in doing business in the Kingdom of Cambodia.
In accordance with Prakas 270, there are three types of tax audit:
Which enterprises are selected for audit?
The selection of enterprises to be audited shall be based on the following criteria:
Timeframe of audit
Before starting an audit, the tax administration shall give notice of an audit to the taxpayer or representative of the taxpayer.
An audit may begin 10 days of working day after the delivery of the notice letter on the audit to the taxpayer or sooner at the request of the taxpayer. In special case based on Article 100 and Article 116 of the Law on Taxation, the tax administration may conduct an audit without giving notice to the taxpayer.
In case of having enough documents, the audit duration is set no later than 03 months for desk audit and limited audit and 06 months for comprehensive audit.
Request for audit delay
In case of being unable to accept an audit as stipulated in Article 9 of this Prakas, the taxpayer may request a delay in the audit based on a proper reason not exceeding 30 days from the due audit date stated in the notice letter. In case of requesting less than 10 days, the taxpayer may make an oral request to the tax auditors. In case of requesting from 10 days to 30 days, the taxpayer shall make a request in writing to the Department Director or Director of Provincial/District Tax Branch.
After completing an audit, the taxpayer shall make a report on the audit result in which there could be tax re-assessment or no tax re-assessment and the notice letter on the tax re-assessment shall be sent to the taxpayer or taxpayer representative.
Protestation against Tax Re-Assessment
Any taxpayer who disagrees to any part or the whole of the tax re-assessment and protests to the tax assessment unit as stipulated in paragraph 3 of Article 15 of this Prakas has the right to protest in writing to the General Department of Taxation within 30 days after receiving the notice letter on tax collection by attaching the letter of protest to the tax assessment unit and evidence to prove that the tax assessment is not correct. The rules and procedures for the protest shall follow Prakas 1470 dated 06 November 2015 on Rules and Procedures for Resolution of Tax Protest.
Advance Grand Formula Co., Ltd is a Cambodian tax agent under license number – TA202204002.
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