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CAMBODIA: Domestic Currency Use Mandatory for Tax Invoices from 1 April

As of 1 April 2019, individuals and businesses will be obliged to issue tax invoices only in Riel, the domestic currency. While they will be permitted to continue using the US Dollar (which is widely used as legal tender) as the base currency, the total amount, including the tax charged, must be shown in Riel. In cases where the US Dollar is used as the base currency, the exchange rate must be either the one notified by the country’s General Department of Taxation (GDT) in the month immediately preceding the relevant transaction or the prevailing market rate. If the latter is used, it must not be less than the corresponding daily exchange rate issued by the National Bank of Cambodia.

At present, the majority of tax invoices are issued in the US Dollar as it is preferred to the Riel for business transactions in the country. The latest move is, therefore, seen as a bid by the GDT to bring current practices in line with its electronic tax payment system, which mandates the clearance of all tax liabilities in Riel. The move is also in line with the GDT’s recent adoption of an online tax returns filing system, which facilitates the submission of supporting documents (including tax invoices) in an electronic format. It is expected that the move will, in turn, lead to an overall increase in the use of the country’s domestic currency.

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