On 3 August 2018, the Ministry of Economy and Finance issued Prakas No. 741 MoEF.BrK which introduce a rule and procedure for implementing income tax and other taxes related to the activity of cut, make and trim of qualified investment projects.

Scope

This Prakas covers qualified investment projects in the garment, textile, footwear, bag, hand bag
and hat sector in the Kingdom of Cambodia that carry out the activity of supplying Cut, Make and
Trim service as per a contract for exports.

This Prakas does not apply to local supporting industry or contractor that supplies goods or services
for supporting the export of garment, textile, footwear, bag, hand bag and hat enterprises as
stipulated in Prakas 311 MoEF.BrK dated 19 March 2014.

Definition

The term “Cut, Make and Trim” abbreviated to “CMT” refers to the supply of Cut, Make and Trim service as per a contract with the goods owner to export finished products.

Conditions for supplying CMT service
The enterprise that supplies CMT service shall comply with the following conditions:
1- Notify the General Department of Taxation of its CMT service operations within 30 days
after signing a contract with the goods owner by attaching the CMT service contract
indicating the detail of the scope of work, service fee and payment conditions.
2- Possess, keep and maintain accounting records and information related to CMT service in
accordance with the Cambodian International Financial Reporting Standard (CIFRS) and tax
provisions.
3- Have supporting documents as stipulated in Article 9 of this Prakas.

Incentives for Income tax

For tax purposes, the activity of CMT shall be considered the activity of producing [goods] for
exports that receive an incentive on income tax the same as qualified investment project that
produces [goods] for exports.

Possession, keeping and correction of accounting records
The enterprise that supplies CMT service shall possess, keep and maintain accounting records in accordance with the Cambodian International Financial Reporting Standard (CIFRS) and tax provisions.

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.