The standard operating procedure (SOP) on tax audits and tax crime investigations was finally signed in early April and made public in early May. This was in response to the tax measures that the Royal Government of Cambodia (RGC) announced during the Public-Private Sector Forum in November 2023. The SOPs aim to ensure predictability, boost a business-friendly environment, the ethics of the tax auditors, and full compliance of tax crime investigations with the Criminal Procedure Code of Cambodia. Even while the SOPs are essentially a restatement of the current tax law, there are a few important new features that all taxpayers should take into consideration.

Types of tax audit

Desk Audit is audit carried out within a year of the tax return filing date, using data that is available to the Tax Administration.

On-site Audit comprises of

1. Limited Audits (LA): aiming at verifying monthly tax compliance during the current tax year and preceding tax year (N-1); and
2. Comprehensive Audits (CA): aiming at verifying monthly and annual tax compliance within 3 years (N-3) or 5 years (N-5) back. While the tax audit up to N-3 can be conducted on the basis of risks, the tax audit up to N-5 can only be performed with the approval of the Minister of Economy and Finance on an exceptional basis. It is worth noting that this SOP does not supersede Prakas 270 on Tax Audit, it could be therefore understood that the tax audit up to N-10 may be conducted solely on a very exceptional basis, i.e., there is hard evidence of obstruction committed by the taxpayers.

Risk-based procedures must be used for the LA and CA, and taxpayers must get notice of the related tax reassessment within one to three months after the tax audit's conclusion.