Tax Audits for VAT Reverse Charge on E-goods, Services and IT

Introduction

Since April 2022, born from the COVID boom of online business, a new and costly tax system was created in Cambodia to hit a very wide range of cross border transactions. Although taxpayers are supposed to implement this already for nearly 2 years, misunderstandings about the scope of the VAT Reverse Charge are widespread. We notice in practice that only few taxpayers correctly assess which transactions are included in Cambodia’s newest VAT impost. Online obtained services virtually all trigger VAT Reverse Charge. So is, in many circumstances, obtaining advice from overseas, advertising, data storage, and so on.
In this uniquely practical briefing, we focus on the actual tax audit by tax officials on this VAT Reverse Charge and Withholding tax related to e-commerce transactions. What have tax officials been asking and claiming? How have the rules been applied in reality? And, what can you do to avoid tax reassessments and resolve disputes?

Highlights

• Tax audit experiences on VAT Reverse Charge and WHT
• Which non-IT services has the GDT sometimes reassessed with VAT Reverse Charge?
• Cross border services, software and IT: what has been the experience in actual GDT audits?
• How to make sure the VAT Reverse Charge becomes an input credit?
• Are there any successful defenses against VAT Reverse Charge?
• How to apply Withholding Tax, DTA and VAT on cross-border services and royalties
• Special VAT concerns for banks and MFI
• Are there steps you can take so that VAT Reverse Charge does not apply?