(Prakas No. 071 MEF.Prk. GDT, dated 30 January 2024)
The Ministry of Economy and Finance (MEF) issued this Prakas to provide taxpayers or withholding agents under the self-assessment regime with an exemption from administrative penalties, including additional tax, interest, and fines, for the voluntary amendment of their tax declarations due to unintentional errors until the end of June 2024. This penalty exemption shall be applicable to the amendment of accounting records or tax declarations pertaining to transactions prior to January 2024 only.
The below penalty exemption shall apply to any amendment during tax audit periods:
1. Prior to the Tax Auditor’s Findings
The taxpayers or withholding tax agents shall be eligible for the exemption on additional tax, interest, and fines upon filing for the amendment of tax declarations (if no minutes of the meeting were prepared or provided by the tax auditors for their findings).
2. After the Tax Auditor’s Findings
10% additional tax and 1.5% interest shall remain payable in accordance with prevailing laws and regulations. However, the additional tax and interest paid on the voluntary amendment can be offset against the amount of additional tax and interest during the tax audit.
Comments
This MEF Prakas amends Prakas No. 217, dated 14 March 2022, and introduces more favourable incentives for the voluntary amendment of tax declarations. Previously, taxpayers submitting voluntary amendments may be eligible for reduced interest, subject to certain conditions, but additional tax will still be imposed. Furthermore, the additional tax and penalties are generally not allowed as offset against the tax audit reassessment.
Under this new Prakas, taxpayers are now incentivised to voluntarily amend erroneous tax declarations thereby encouraging a more transparent compliance process and good governance. This also provides a window of opportunity for taxpayers to review their current tax compliance practice and determine any areas of non-compliance or further improvement to mitigate any financial implications associated with unintentional errors or oversight in the tax declarations. It should be noted as provided under the Law on Taxation, taxpayers are allowed to voluntarily amend the tax declarations within 3 years after the submission date.
To avail of the above-mentioned incentives, the voluntary amendments should be made on or before 30 June 2024.
Source: KPMG
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