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The 10% VAT and Facebook Boosting in Cambodia: What to know for your business!





When it comes to business, especially for e-commerce companies, tax is one of the most complicated issues for both the seller and buyer. While some countries have a unified sales tax, other countries charge different taxes depending on where the seller is located. When it comes to Cambodia, the country has a value-added tax (VAT) of 10% in addition to local taxes. This means that the goods and services that are sold in Cambodia will be subject to the local tax and the VAT. Since the introduction of the VAT in Cambodia in January this year, businesses have been questioned about the impact of it on their operations. To help businesses understand the implications of the new tax, this article will discuss the impacts of the new tax, the taxes charged in other countries and the ways to keep your business and operations as operational costs and not taxable income.

What is the Impact of the New 10% VAT on Businesses in Cambodia?

The VAT is one of the most complicated issues for both the seller and buyer. For sellers, they will have to charge the VAT on their goods or services and pay it themselves. The government justifies the new tax by stating that it will prevent tax evasion by businesses. Businesses in Cambodia are not happy about this new tax because they do not see how it will be beneficial to their operations. They are also concerned about how it will affect customers’ perceptions of their business. Customers may think that prices of products and services now include VAT; therefore, companies may be forced to raise their prices in order to offset the cost of paying for this new tax. So, You are going to reduce 10% of the boosting fee....

Why was the 10% VAT Introduced in Cambodia?

In April of this year 2022, the 10% VAT was introduced in Cambodia. The VAT is a consumption tax charged on goods and services sold to consumers within the country. The introduction of the VAT in Cambodia is expected to have a significant impact on most businesses operating in the country. It will affect those businesses that are importing goods and services, those with large transactions across borders, and those with high value-added products or services. The reasons for introducing this tax are because there is currently no unified national sales tax and it has been seen as fair to all sectors of society. In addition, it is being introduced as an effort to promote economic development by controlling inflation, reduce imports of raw materials, improve tax equity between sectors and increase revenue for the government through using this collection method.

How to Calculate the VAT Amount Due on an boosting

To calculate the VAT owed on a specific order, use the following formula: Boosting fee + 10% = Amount to Pay. For example, if you put an ad boost for $10,000 and the VAT rate is 10% then $10,000 + $100+ ($500 * 10%) = $10,100. But in Facebook, they will charge you in the the amount you pay. So, you need to provide your business patent of GDT to Facebook so that they can help you to report that you already to pay on the advertisement.


What is the benefit of paying VAT?

In fact, paying tax is our obligation. But after you pay for the VAT, you can also put it as the expense of your company, so your profit will be reduce (Before we cannot declare the ad expense). Relatively your profit tax is reduced.

Therefore, your ROI of the advertainment is now more important. You need to train your skill on how to target the audience and increase your ROI of boosting!

Final Words

The VAT in Cambodia is 10%. It’s important to keep this in mind when setting prices for goods and services. The VAT will apply to all goods and services that are sold within the country. There is a minimum threshold of $1,000 per transaction which must be reached before the VAT is applicable. Some basics about the tax: -It applies to all goods and services that are sold within the country -The VAT will not apply if gross receipts are less than $1000 per transaction -Businesses may opt for an exemption on the new taxes if they qualify.

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