Tax Residency in Cambodia
1. Criteria for Determining Tax Residency
According to Article 3 of the Cambodian Law on Taxation, an individual is considered a tax resident if they meet any of the following criteria:
- Physical presence in Cambodia for more than 183 days in a calendar year.
- Domicile in Cambodia, as determined by the Cambodian Civil Code.
- Cambodian citizenship.
For entities, tax residency is determined based on their place of incorporation or management and control. A company is considered a tax resident if it is incorporated in Cambodia or if its management and control is exercised in Cambodia.
2. Impact of International Tax Treaties
Cambodia has entered into several tax treaties with other countries to prevent double taxation and promote cross-border trade and investment. These treaties may modify or provide exceptions to the standard criteria for tax residency as defined in domestic law.
For example, under the Cambodia-Thailand tax treaty, an individual is considered a resident of Cambodia if they have a permanent home in Cambodia and spend more than 183 days in Cambodia in a calendar year. However, if the individual also has a permanent home in Thailand and spends more than 183 days in Thailand in a calendar year, they will be considered a resident of both countries. In such cases, the treaty provides tie-breaker rules to determine the individual's tax residency.
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