Tax Holidays and QIP

 Tax Holidays for Qualified Investment Project (QIP) under Cambodia Tax

A Qualified Investment Project (QIP) is a project registered and recognized by Council for Development of Cambodia (CDC) will be entitled to tax holiday.

Tax holiday period = trigger period [1] + 3 year + priority period [2]

[1] The trigger period starts on the date of Final Registration Certificate is issued by Council for Development of Cambodia (CDC) and ends on the last day of the taxation year immediately preceding the earlier of :

– If the QIP derivers a profit – tax year that the profit is first derived; or
– If the QIP derives income from the investment activity – the third tax year after the tax year in which the income is first derived.

[2] Priority period is determined by Council for Development of Cambodia (CDC) based on the investment capital, industry and other factors.

QIPs approved by Cambodian Development Council (CDC), they will receive the benefits as below:

1. Exempted from tax on income /profit (ToI / ToP) and Prepayment of Income /Profit Tax (PIT /PPT) during the exempted period / Tax holiday period above.
2. Exempted from minimum tax, but for new legislation, minimum tax (MT) for all taxpayers is exemption if they maintain proper accounting records but minimum tax is taxable if taxpayers including QIP did not keep proper accounting records. Please read more: Minimum Tax Exemption
3. Special depreciation rate of 40% in the first year of the used of its property in their production or processing. This is eligible only the ToP exemption is not taken. Please read more: Special Depreciation
4. Import duty exemption on the import of construction materials and equipment.