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The business of Zhengheng group at home and abroad involves banking, real estate, investment, network, human resources, science and technology, cultural innovation and business travel industry and other fields.While actively investing in the industrial layout, Zhengheng group is also vigorously introducing the advanced management mode of developed countries and promoting the industrial upgrading of Cambodia. In this process, it reconstructs the business model and organizational model, creates an industrial cluster with Zhengheng characteristics, and is committed to becoming an international first-class comprehensive development led by strategy, driven by innovation and promoted by value enterprise groups.
 

Ministry of Finance of Cambodia Approved the Reduction of Withholding Tax on Interest on Borrowings to Ease Financial Pressure of Enterprises Due to the Pandemic

Release time:2020-06-03 Reading volume:467 Source:Ministry of Finance of Cambodia By: Lu Jiming

(Phnom Penh) The Ministry of Finance made the announcement of reducing the withholding tax on interest on domestic or international borrowings to help enterprises tide over the COVID-19 crisis.
 

According to the letter of Kong Vibol, director general of Cambodia’s General Department of Taxation, to Neak Oknha Kith Meng, president of Cambodia Chamber of Commerce, the Ministry of Finance has approved the application of Cambodia Chamber of Commerce, and decided to temporarily lowered the withholding tax on interest on borrowings of enterprises (15% for domestic borrowings and 14% for international borrowings).
 

It means that all enterprises can enjoy the concession of reduced withholding tax on interest as banks and financial institutions.
 

As pointed out by the letter, the withholding tax on interest payable by enterprises for borrowings from domestic non-financial institutions or current international borrowings will be reduced to 10% from April 1 to December 31 this year. For the new loans enterprises apply through the above-mentioned approach this year, the withholding tax on interest will be reduced to 5%, adjusted to 10% next year, and restored to the original level in the year after next.
 

As emphasized by the letter, enterprises can’t apply for new loans after loan repayment to pay less taxes, otherwise enterprises will be considered evading taxes by the taxation authority, and imposed with relevant taxes and fines.
 

It’s worth mentioning that the Cambodian government decided to reduce the withholding tax on interest on domestic and international loans of banks and financial institutions as it announced the fourth round of pandemic response measures on May 26.
 

According to relevant pandemic response measures, the withholding tax on interest on domestic and international loans issued by banks and financial institutions this year (in 2020) is  reduced from 15% to 5%, adjusted to 10% next year (in 2021), and restored to the original level in the year after next (in 2022).
 

International creditors entitled to the concession of withholding tax on interest include countries which have entered in the Avoidance of Double Taxation Agreement (DTA) with Cambodia or other countries.

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