A Quick Guide to the Latest Prakas Update

On 17 November 2025, the Ministry of Economy and Finance (“MEF”) has issued a new Prakas on imposition of Value Added Tax (“VAT”) under state charge on basic meals for daily living of citizens to replaces and abrogates Prakas No. 171 MEF.PrK.GDT dated 20 March 2024.

Key Highlights

This regulation imposes VAT under state charge (i.e., VAT payable by the state instead of taxpayers) on specific locally produced basic food items, aiming to ease the cost-of-living burden for citizens.

I. Scope of Application

The VAT under state charge applies to the local supply of basic meal goods provided by self-assessed regime taxpayers (i.e., those registered under the self-assessment regime).

II. Definition of “Basic Meal”

For the purpose of this Prakas, basic meal items include specific locally produced goods that are essential for daily consumption:

Meat of livestock (fresh, dry salted/cured, or smoked)
All types of animal eggs (fresh or processed)
Freshwater and saltwater fish, lobster, shrimp, prawn, crab, and mollusks (raw, cured, or smoked)
All types of sugar (excluding candy)
All types of salt
All types of soy sauce and fish sauce

III. VAT Treatment

VAT on the local supply of basic meals as listed above shall be imposed under state charge from 1 January 2026 to 31 December 2028.
Restaurant food services are excluded sales of meals by restaurants do not qualify for VAT under state charge.
 
 

For more details and assistance in reviewing your tax obligations under this Prakas, please contact us.

On 19 November 2025, the Ministry of Economy and Finance (“MEF”) has issued a new Prakas introducing updated procedures and extending tax incentives for enterprises operating in Cambodia’s agricultural sector.

Key highlights

This Prakas aims to promote agricultural productivity, enhance competitiveness, and support domestic supply and export activities. The incentives apply to enterprises engaged in the cultivation, production, domestic supply, or export of the following:

-  Rice, corn, bean, pepper
-  Cassava, cashew nuts, rubber
-  Pailin longan, mango, banana
-  Aquaculture and animal husbandry
-  Local palm oil used as raw material for animal feed
 

l. VAT state charge mechanism continues

Suppliers delivering goods or services to enterprises engaged in eligible agricultural activities specified in the Prakas (grow, produce, domestically supply or export rice, corn, bean, pepper, cassava, cashew nuts, rubber, Pailin longan, mango, banana, aquaculture, and local palm oil which are raw materials for animal feed) must not charge output VAT, while remaining eligible to claim input VAT credits related to these supplies.

II. Tax incentives

Suspension of Minimum Tax, PTOI, and WHT exemptions on the service payment to suppliers who are not under the self-assessment regime to continue to support agricultural activities as mentioned above.

III. Compliance obligations

1. Agricultural enterprises

- Obtain a VAT state charge certificate from GDT
- Submit a supplier list with monthly VAT returns
- Maintain proper accounting records
- File accurate and timely tax returns
 

2. Local palm oil suppliers

- Submit a purchaser list with monthly VAT returns
 

3. Revocation

- Non-compliance may result in revocation of tax incentives.

The new Prakas is effective from 1 January 2026 and extends the incentive period through 31 December 2027.

For more details and assistance in reviewing your tax obligations under this Prakas, please contact us.

On 26 December 2025, the Ministry of Economic and Finance (“MEF”) issued Prakas No. 1123 MEF.Prk.GDT to suspend the payment of prepayment on income tax for enterprises operating in the textile and garment industry. This measure is intended to ensure sustainability, promote exports, and maintain employment opportunities within the sector.

Key Highlights

The suspension applies to Qualified Investment Projects (QIPs) in the textile and garment sector whose income tax exemption period has expired. It covers enterprises engaged in the production of textiles, garments, footwear, luggage, handbags, hats, and related export-oriented products such as garment labels, gloves, socks, towels, pillowcases, blanket covers, mattresses, and tablecloths. The suspension will remain effective until the end of 2028.

To benefit from this incentive, enterprises must:

• Maintain proper accounting records in compliance with Cambodian Law on Taxation, and the laws and regulations on accounting and auditing,
• Submit tax declarations and pay other taxes on time, and
• Provide an annual independent audit report to the tax administration. 

Failure to meet these conditions will result in the revocation of the suspension and the imposition of penalties under applicable laws and regulations.

This Prakas takes effect from 26 December 2025. Any provisions contrary to this Prakas are abrogated. 

For more details and assistance in reviewing your tax obligations under this instruction, please contact us.