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On 13 March 2017, the National Bank of Cambodia ("NBC") issued a Prakas No. B7-017-109 on Setting Interest Rate Ceiling of Loan ("Prakas").
According to the Prakas, all microfinance institutions and rural credit operators shall set interest rates on loans not exceeding 18% per annum. The aforesaid interest rate ceiling is applicable to new loan agreement, including restructured loans and refinancing, entered into from 1 April 2017 onwards.
Any microfinance institution and rural credit operator that fails to comply with this Prakas shall be subject to the general disciplinary sanction under Article 52 of the Law on Banking and Financial Institutions.
On 7 February 2017, the Royal Government of Cambodia enacted Sub-Decree No. 17 ANKr.BK ("Sub-Decree No. 17") with the clear objective of creating a transparent and equitable tax system by encouraging all businesses to register for tax.
Sub-Decree No. 17 addresses this objective by providing that small and medium-sized enterprises ("SMEs") which voluntarily register with the General Department of Taxation ("GDT") in 2017 and 2018 are provided a two-year exemption on Tax on Profit. During the two-year exemption on Tax on Profit, SMEs will also be exempted from the annual 1% Minimum Tax and the monthly Prepayment of Profit Tax.
In the year following the end of the two-year exemption on Tax on Profit, SMEs will be subject to the applicable standard Tax on Profit rates and / or Minimum Tax in accordance with the regulations provided by the Law on Taxation.
On 2 February 2017, the GDT released Notification No. 2142, which provides for the “market rates” for determining the caps on interest rate deductions for loans in Khmer Riel ("KHR") and United States Dollars ("USD") for the 2016 financial year.
- For loans denominated in KHR, the market rate is 15.29% per annum based on the average interest rates of the 3 largest local commercial banks.
- For loans denominated in USD, the rate is 9.47% per annum based on the average interest rates of the 12 largest local commercial banks.
On 15 February 2017, the Telecommunication Regulator of Cambodia ("TRC") issued Letter No. 0276 TRC on the control over the commercial advertising of all mobile network operators in Cambodia. This Letter sets out the actions that the Government will take to strengthen the engagement in dealing with unfair competition, as well as to protect the interests of users.
The TRC requires all mobile network operators to:
- request for prior approval from the TRC for any type of advertisement;
- immediately stop all advertising about money exchange or promotion that features lies to users and/or cost base; and
- provide to the TRC the cost base used for voice mail and mobile data for every semester.
The Ministry of Economy and Finance ("MEF") issued Prakas No. 1535 dated 23 December 2016 to set out the procedures on the provisions for doubtful loans of domestic banks, which include both banks and financial institutions and micro-finance institutions ("MFIs"), in accordance with paragraph 4 of the Article 6 of the Law on Taxation in Cambodia. The Prakas sets out the classifications of loans and the respective provision rates for tax deduction.
This Prakas also requires domestic banks to amend the past tax on profit ("TOP") returns to reflect these allowable provisions for doubtful loans.
The GDT of the MEF issued Notification No. 1219 on 19 January 2017 outlining the penalty and interest exemptions resulting from the amendment of filed tax returns.
This Notification No. 1219 outlines how voluntary amendments of filed tax returns will work, and the benefits that come with it. Taxpayers who believe that they have underpaid taxes in previous periods may amend their filed tax returns and pay the underpaid taxes accordingly for at least last three years without incurring penalties and interest from the GDT. This tax amnesty period ends on 1 April 2017.
Once the amnesty period ends, any under-declared taxes found by the tax auditors or that may surface based on the self-amendments of filed tax returns will be subject to normal penalty rates ranging from 10% to 40%, plus applicable interest at the rate of 2% per month.
On 29 December 2016, the Ministry of Commerce ("MOC") issued Prakas No. 422 MOC.IP.P on Registration Procedure and Protection of Geographical Indication Mark ("Prakas 422") to implement Law NS/RKM/0114/006 on Geographical Indication Mark dated 20 January 2014 ("Law 0114/006").
According to the above Prakas, the Department of Intellectual Property Rights of MOC is the competent authority in registering geographical indication mark, receiving opposition filed against such registration, managing, permitting the use of national sign of geographical indication, and implementing court decisions or decisions of the Council in charge of Geographical Indication Mark.
Any products such as agricultural, agro-alimentary, hand-craft or any other transformed products in a region could be subject to registration for protection as geographical indication mark. The applicant for such registration must be a geographical indication association of producers or operators according to Article 5 of this Prakas and Article 7 of Law 0114/006.
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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