Benefits of owner and family

Benefits of owners and family for Cambodia Tax

Benefits of owners and family are non-deductible expense for tax on income (profit). Company may pay health insurance, school fee, house rental etc for owners and person family if they are not employees, so these expenses are non-deductible expenses for tax on income (profit).

If owners and family members are employees, benefits may be subject to tax on fringe benefit based on nature of expense.

Example 1

Assume that Mr. B is owner of XYZ company, and XYZ paid car insurance $400 for Miss.C, daughter of Mr.B.

Required

If Miss.C is not employee of XYZ Company, recommend amount $400 for Cambodia Tax Treatment.

Answer

1. Expense for car insurance to Miss.C is accounting expense, but Cambodia tax treated this expense as non-deductible expense for tax on income (profit).
2. Amount of $400 is not subject to tax on fringe benefit because she is not employee of XYZ Company.
3. Amount of $400 is not subject to withholding tax on service (15%) because Miss.B does not perform service for XYZ company.