This article provides a clear overview of Cambodia’s (KH) individual income tax system for 2025. It outlines income thresholds, applicable tax rates, special flat rates, and relevant frameworks as currently implemented.
Income Tax Framework in Cambodia
Cambodia applies a progressive individual income tax system assessed on annual income. Resident taxpayers are taxed on income generated in Cambodia, and the system uses the Cambodian riel (KHR) as its reporting currency. Non-residents face a different tax regime, which will be detailed below.
Individual Income Tax Rates and Brackets (2025)
The Cambodian income tax framework uses progressive rates depending on annual income levels. For the 2025 tax year, these rates and brackets are as follows:
| Income Range (KHR, annual) | Tax Rate (%) |
|---|---|
| ៛0 – ៛1,500,000 | 0% |
| ៛1,500,001 – ៛2,000,000 | 5% |
| ៛2,000,001 – ៛8,500,000 | 10% |
| ៛8,500,001 – ៛12,500,000 | 15% |
| Over ៛12,500,000 | 20% |
(Exchange rate for USD reference: ៛4,100 ≈ $1 USD; e.g., ៛1,500,000 ≈ $366 USD)
Special Flat Rates and Surtaxes
Beyond the progressive bands for resident taxpayers, Cambodia levies separate flat rates under specific circumstances, particularly for non-residents and for fringe benefits.
| Condition | Flat Rate (%) |
|---|---|
| Non-residents (on Cambodian-sourced salary) | 20% |
| Fringe Benefits (on value of benefits) | 20% |
For non-residents, the 20% flat rate applies directly to Cambodian-sourced income. Similarly, any fringe benefits provided to an employee (e.g., housing or transport allowances) are taxed at a flat rate of 20% on their assessed value.
Assessment Basis
The taxable base is individual income. This encompasses all relevant income sources earned in Cambodia, but does not automatically extend to global income for non-residents.
Notable Features of Cambodia’s Income Tax System
- Progressive Rates: Rates rise from 0% to 20% depending on income level.
- High Surtaxes for Non-Residents: Cambodian-sourced salary for non-residents is taxed at a flat 20% rate, with no progressive bracket.
- Taxation of Fringe Benefits: Any non-salary benefit provided is assessed at 20%, irrespective of resident status.
- No Information on Deductions or Credits: Current public data does not specify allowances or credits for individuals.
Pro Tips for Managing Income Tax in Cambodia
- Ensure that you confirm your residency status annually to determine if you fall under the progressive or flat rate regime, as this affects total liability significantly.
- Review all employment contracts or benefit packages to understand how taxable fringe benefits may impact your final tax bill at the 20% flat rate.
- Keep precise, up-to-date records of your Cambodian income; documentation is key in case of audits or clarifications from tax authorities.
- If you are a non-resident with Cambodian income, note that no lower brackets apply: all qualifying salary is taxed at 20%.
- For the most accurate and authoritative information, periodically check the official website of the General Department of Taxation at https://www.tax.gov.kh/.
Official Resources
In closing, Cambodia’s individual income tax regime in 2025 is straightforward: progressive rates for residents, flat rates for non-residents and on fringe benefits, and a clear structure based on income generated within the country. It’s essential to identify under which regime you fall and maintain meticulous income records. For those with complex compensation or cross-border arrangements, understanding these distinctions ensures compliance and potentially avoids unnecessary tax exposure.