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In accordance with Prakas No. 283 dated 12 November 2014, issued by the Ministry of Labor and Vocational Training, the Royal Government of Cambodia ("RGC") has decided to increase the minimum wage of the workers and employees of certain sectors of industry, such as textile, garment and footwear for the year 2015 to USD 128 per month and USD 123 per month for the workers or employees under a probationary period.
Under this same Prakas, workers and employees who are being paid based on their productivity shall also be subject to the minimum wage even in the event that their productivity is lower than the minimum sum.
New requirements and procedures for tax registration have been set out under Prakas No. 1139 MEF.P dated 9 October 2014, issued by the Ministry of Economy and Finance ("MEF"). This new reform has entered into force and has been implemented by the General Department of Taxation ("GDT") and other tax branches nationwide.
Under this new procedure, in the event of a new company registration, it is strictly required that the Chairman or Director who is the applicant of the tax registration and whose name will be registered on the Certificate of Patent Tax shall scan his or her fingerprint and take his or her photo at the National Tax School in person. Registered companies are also required by the GDT to update their tax information in accordance with the notification dispatched by the tax administration.
Furthermore, under this same Prakas, the GDT has also introduced a new method of tax registration, through which an applicant may register online via the GDT's website.
His Majesty has promulgated the new Law on Insurance under the Royal Kram No. NS/RK/0814/021 dated 4 August 2014. This new Law on Insurance enters into force on the sixth month after its promulgation, and will then abrogate the previous law.
The new law defines clearer procedures in applying for both life and general insurance licenses, conditions of formality and validity of an insurance agreement, types of insurance products, parties' obligations, etc. Additionally, this law also states that all licensed insurance companies shall update their information in accordance with new requirements, such as the new minimum registered capital criteria. This will be determined by a separate Sub-Decree of the RGC.
Due to non-compliance of numerous companies that have obtained the approval from the RGC to hold economic land concession ("ELC"), the RGC has instituted an Inter-ministerial Commission to take charge of supervising, measuring and evaluating the ELC. This Commission is composed of numerous high-ranking governmental officials, including ministers, the general commissioner of the national police, and heads of departments.
This Commission shall make decisions regarding the revocation of the ELC from any private company that has breached the agreement that it has entered into with the RGC.
In order to strengthen the banking sector, the National Bank of Cambodia ("NBC") has established a working group at the national level work closely in taking measures to the prevent and suppress all types of banking crimes.
The NBC has clearly determined the duties and responsibilities under its Decision No. B12.014.017.D. The working group;s duties and responsibilities include identifying threats originating from money laundering and the financing of terrorism, analyzing types and sources of crimes and taking action against such crimes.
The Ministry of Economy and Finance ("MEF") aims to assure that the tax sector will be the first sector to successfully reform and to increase the State's income by establishing this department under Prakas No. 960 MEF.E. The duties of this department include the gathering of information on taxable persons, standardizing procedures, and conducting internal audits and tax crimes inspection.
This department consists of 6 offices, including the Taxable Persons' Information Office, Internal Audit Office, and the Tax Crimes Inspection Office.
Prakas No. 962 MEF.P dated 28 August 2014 imposes a stamp duty on the transfer of ownership of immovable property, set as 4% of the price of the property.
The MEF has clearly set out prices for each province of Cambodia in the annexes of this Prakas. Therefore, in the event that the price agreed by the parties is lower than the price determined by the Prakas, the General Department of Taxation ("GDT") shall impose the 4% stamp duty in accordance with the price determined by the Prakas. However, in the event that the price agreed by the parties is higher than the one determined by the Prakas, the tax shall be imposed in accordance with the agreed price.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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R&T Sok & Heng Law Office Vattanac Capital Office Tower Level 17, No. 66, Preah Monivong Boulevard, Sangkat Wat Phnom, Khan Daun Penh 120211 Phnom Penh, Cambodia http://kh.rajahtannasia.com
Contacts: Heng ChhayManaging PartnerD +855 23 215 734 F +855 23 726 417 heng.chhay@rajahtann.comSok KhavanPartnerD +855 23 215 734 F +855 23 726 417 sok.khavan@rajahtann.comDesmond WeeDirectorD +65 62320474desmond.wee@rajahtann.comRajah & Tann Asia is a network of legal practices based in Asia. | Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client. | This update is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this update. |
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