The Royal Government of Cambodia just released Sub-Decree 50 ANKr.BK on Customs Incentives for Small and Medium Enterprises in the Priority Sectors dated March 25, 2019.

This is part of efforts of Royal Government of Cambodia to push Small and Medium Enterprises as a main driver of economic growth. Other SME support programs include tax incentives, SME Bank, Techo Startup Center, Skills Development Fund, and Khmer Enterprise.

We provide customs incentives as below.

Definition

SMEs are defined:

• "Small-sized Enterprises” is any business having an annual revenue turnover of 250 million Riel to 700 million Riel (around US$62,500 to US $175,000), or a enterprise considered as a small taxpayer according to the laws and regulations or having 10-50 employees.
• “Medium-sized Enterprises” is any business having annual revenue turnover of 700 million Riel to 4 billion Riel (US$175,000 to US$1,000,000), or an enterprise categorized as a medium taxpayer according to the laws and regulations or having 51-100 employees.

Priority sectors

To receive benefits, SMEs shall fall in priority sectors:

1. Clean water production and supply
2. Agricultural production or agro-industry
3. Food production and processing
4. Manufacturing of goods for export
5. Manufacturing of goods consumed locally, waste recycling, and goods for tourism sector
6. Manufacturing of finished goods or spare part or assembling parts for other manufacturers
7. Research and development related to information technology (IT) including supply of service of innovative IT- based management
8. Enterprises located in SME cluster zones and enterprises which develop these clusters

These sectors shall affect social security, health and environment.

Customs incentives

Customs incentives for SMEs are as followed:

1. Clean water producers and suppliers are entitled to same customs treatment as export enterprises
2. Export enterprises are entitled to customs exemption on production equipment, construction material and production inputs. If production inputs are processed but not exported, enterprises shall fulfill customs duty of these production inputs at the time of import.
3. Supporting industry enterprises are entitled to customs exemptions on production equipment, construction material and production inputs. If production inputs are processed but not exported, enterprises shall fulfill customs duty of these production inputs at the time of import.
4. Enterprises serving domestic consumption are entitled to customs exemptions on production equipment and construction material. If these enterprises can export part of direct productions, production inputs which are already paid for customs and exported are exempted for customs after customs audit.
5. Enterprises engaging research and development are entitled to customs exemption on installation equipment and equipment usage in innovative research and development.
6. SME cluster zone developers are entitled to same customs treatment as Enterprises serving domestic consumption.

Advance Grand Formula Co., Ltd is a Cambodian tax agent under license number – TA202204002.

Should you need any further information or support, please contact us at: tax@advancegroupkh.com.