KICPAA ATQ cheat sheet

Tax on Income (TOI) applies to resident taxpayers on worldwide income and to non-residents on Cambodian-source income; the standard corporate rate is 20% of taxable profit.

Taxable profit = accounting profit adjusted for non-deductible expenses, exempt income, and tax incentives; the minimum tax is 1% of turnover (excluding VAT) where applicable, or the TOI liability if higher.

Monthly prepayment of TOI (prepayment of tax on income) equals 1% of monthly turnover; it is credited against the annual TOI liability.

Withholding tax: 15% on Cambodian-source payments to non-residents; 15% on interest paid to residents (10% for banks/insurers), 10% on services and royalties, and 15% on rent and dividends to residents.

VAT standard rate is 10%; exports and certain supplies are zero-rated; VAT registration threshold for small taxpayers is defined by turnover, and monthly VAT returns are due by the 20th of the following month.

Specific tax applies to certain goods (alcohol, tobacco, petroleum, vehicles) at rates from 3% to 35%; public lighting tax is 3% on alcohol and tobacco, and accommodation tax is 2% on hotel/lodging services.

Annual patent tax is due at the start of the business year; the amount depends on turnover tier and applies to all registered businesses.

Cambodian Financial Reporting Standards (CFRS) follow IFRS for public-interest entities and IFRS for SMEs for non-public entities; financial statements are prepared in riel (KHR) with USD often used for reporting.

Qualified Investment Project (QIP) incentives under the Law on Investment include income tax exemptions or special depreciation, plus customs duty exemptions on production inputs and equipment.

Monthly tax returns (VAT, withholding tax, salary tax) are due by the 20th of the following month; annual TOI return is due by 31 March of the following year.

Salary tax (personal income tax on employment) uses progressive monthly rates from 0% to 20% after deducting a 150,000 KHR allowance per dependent.

Taxpayers are classified as small, medium, or large based on turnover and sector; large taxpayers file with the Large Taxpayer Department (LTD).

Tax audit types: desk audit, limited audit (typically 3 years back), and comprehensive audit (up to 10 years back in some cases); the taxpayer must respond within 30 days to a tax reassessment notice.

Tax penalties include a 10% late-filing penalty, 1.5%-2% monthly interest on unpaid tax, and additional penalties for underreporting or obstruction.

E-invoice and e-filing via the GDT (General Department of Taxation) online system are mandatory for registered taxpayers.

Self-assessment regime requires taxpayers to maintain accounting records, issue proper invoices, and keep records for at least 10 years.

Transfer pricing rules apply to related-party transactions; Cambodia adopted arm's-length principle rules in 2021, with thresholds for disclosure and documentation.

Tax disputes: taxpayer may file an objection with the GDT within 30 days, then appeal to the Tax Tribunal, then to the court.

CFRS for public-interest entities includes full IFRS; CFRS for SMEs is based on IFRS for SMEs with limited modifications; National Accounting Standards apply to non-public entities.

Accrual basis: revenues and expenses are recognized when earned or incurred, not when cash is received or paid.

Depreciation methods: straight-line, reducing balance, and units of production; land is not depreciated; buildings are depreciated over useful life.

Inventory valuation uses lower of cost and net realizable value; cost formulas include FIFO and weighted average (LIFO is not permitted under IFRS/CFRS).

Revenue recognition under IFRS 15: identify the contract, identify performance obligations, determine transaction price, allocate price, and recognize revenue when obligations are satisfied.

Provisions are recognized when a present obligation exists from a past event, an outflow is probable, and the amount can be reliably estimated.

Deferred tax arises from temporary differences between accounting and tax bases; recognized using the liability method at expected tax rates.

Consolidation is required when a parent controls a subsidiary (more than 50% voting power or control); non-controlling interest is presented separately in equity and income.

Impairment: assets are tested when indicators exist; recoverable amount is the higher of fair value less costs to sell and value in use.

Audit risk model: Audit Risk = Inherent Risk × Control Risk × Detection Risk; detection risk is controlled by the auditor through the nature, timing, and extent of procedures.

Materiality is set at the financial statement level and performance materiality (often 50%-75% of overall materiality) for specific balances.

Audit evidence should be sufficient and appropriate; reliability hierarchy: external > internal, direct > indirect, original > copies.

Internal control components: control environment, risk assessment, control activities, information and communication, and monitoring.

Auditor's opinion types: unmodified (unqualified), qualified, adverse, and disclaimer of opinion.

Independence requirements: no financial interest in the client, no close family employment in key positions, and no provision of prohibited non-audit services.

Engagement letter sets out scope, responsibilities, and fee; it should be signed before the audit begins.

Cambodia's audit oversight is under the National Accounting Council (NAC) and the Kampuchea Institute of Certified Public Accountants and Auditors (KICPAA); auditors must be registered with KICPAA.

Professional skepticism: an attitude of questioning and critical assessment of evidence, not assuming management is dishonest but not assuming honesty either.

Cambodian company forms: private limited company, public limited company, partnership, and sole proprietorship; registration is with the Ministry of Commerce.

The Law on Commercial Enterprises governs company formation, directors' duties, and shareholder rights; minimum of one shareholder is required for a private limited company.

Directors owe duties of care, loyalty, and good faith; conflicts of interest must be disclosed to the board.

The Law on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) requires customer due diligence, record-keeping, and suspicious transaction reporting.

The Code of Ethics for professional accountants: integrity, objectivity, professional competence and due care, confidentiality, and professional behavior.

Confidentiality: accountants must not disclose client information without authority or legal obligation, and must not use it for personal advantage.

Corporate governance: separation of board and management, independent directors, audit committees, and internal controls.

Related-party transactions must be disclosed and approved; the arm's length principle applies for tax and financial reporting.

Whistleblowing protections and conflict-of-interest policies are part of governance frameworks.

Break-even point in units = Fixed Costs ÷ Contribution Margin per Unit; contribution margin = selling price − variable cost per unit.

Cost-volume-profit (CVP) analysis uses contribution margin ratio = contribution margin ÷ sales; margin of safety = (actual sales − break-even sales) ÷ actual sales.

Relevant costs for decision-making are future, incremental, and avoidable; sunk costs and allocated fixed costs are irrelevant.

Standard costing variances: material price variance = (standard price − actual price) × actual quantity; material usage variance = (standard quantity − actual quantity) × standard price.

Labor rate variance = (standard rate − actual rate) × actual hours; labor efficiency variance = (standard hours − actual hours) × standard rate.

Absorption costing includes fixed production overhead in product cost; variable costing treats fixed overhead as a period cost; the difference is the change in inventory × fixed overhead rate.

Net present value (NPV) = present value of cash inflows − initial investment; accept projects with NPV > 0; IRR is the discount rate where NPV = 0.

Payback period = initial investment ÷ annual cash inflow (for even cash flows); it ignores the time value of money and cash flows after payback.

Working capital = current assets − current liabilities; the current ratio = current assets ÷ current liabilities; quick ratio excludes inventory.

Job costing accumulates costs per job; process costing averages costs over units produced; contract costing applies to long-term construction.

Overhead absorption rate = budgeted overhead ÷ budgeted activity base (labor hours, machine hours, or direct labor cost).

Activity-based costing (ABC) assigns overhead to activities and then to products based on cost drivers; it improves accuracy where products differ in complexity.

Marginal costing: contribution = sales − variable costs; fixed costs are written off against contribution to get profit.

Differential/incremental analysis compares alternatives on the basis of difference in revenues and costs.

Budget types: fixed, flexible, rolling, and zero-based budgeting; flexible budgets adjust for actual activity levels.

Variance analysis: favorable variance increases profit; unfavorable decreases profit; investigate significant variances based on materiality.

Cost behavior: variable costs change in total with activity; fixed costs remain constant in total within the relevant range; mixed costs have both components.

Relevant range is the activity level over which cost behavior assumptions hold.