Update on the Cambodian Taxation of International Airlines: What Has Changed After the Meeting with GDT on 27 September 2023?

Introduction

On 27 September 2023, thanks to Cambodia Airports, IATA and the Department of Civil Aviation, the GDT joined a tax seminar to brief the airlines on various tax implications of their industry. Rightly or wrongly, many airlines were surprised to learn interpretations by the GDT that day on the tax rules which were new to them. Using the “uplift-rule” to allocate income to Cambodia for international airlines, sale of online tickets and Specific Tax, and the question of withholding tax on leasing of aircraft are some examples in this regard. Now, after the GDT has clarified or perhaps re-clarified some of these important tax principles, what changes for the taxation of these foreign airlines? What was new? What are the implications? That is the subject of VDB Loi’s updated briefing on taxation of airlines in Cambodia, free of charge for clients and invitees.

Highlights

Client briefing on the implications of what the GDT said at the 27 September meeting

• Tickets sold online or outside of Cambodia: GDT’s view on Application of the 10% Specific Tax
• The GDT apparently now choosing the “UPLIFT-method” for the income tax of foreign non-DTA airlines: how to calculate and what is the impact?
• Does Cambodian withholding tax apply to aircraft lease payments? A detailed look at law and DTA aspects
• GDT points of view shared on 27 September 2023: Which are supported by law or regulations? Which may be debatable or subject to change?
• Service fees, shared costs, allocation of global expenses from the head office: What is the GDT position on Cambodian tax consequences?
• Code-sharing, airlines acting as agents for other airlines: Are the tax consequences clear?
• The tax exemptions of art. 8 Double Taxation Agreements: Does it include every income? Does it include lease fees?