Understanding Tax Residency for Foreigners in Cambodia

— And Why Declaration Is Essential

1. Who Qualifies as a Tax Resident?

According to Cambodian tax regulations, a foreign individual is considered a tax resident if they meet any of the following criteria:

• Are domiciled in Cambodia, or
• Maintain their principal place of abode in Cambodia, or
• Are physically present in Cambodia for more than 182 days within any 12‑month period (CBRE, Moore Global).

Once classified as a resident, individuals are taxed progressively on their worldwide income, rather than at the flat 20% rate applied to non‑residents (CBRE).

Tax brackets for residents (Salary Tax / Tax on Salary) include:

• 0% on the first ~KHR 1.5 million/month
• 5%, 10%, 15% on subsequent brackets
• 20% on amounts above KHR 12.5 million/month (ASEAN Briefing, PwC Tax Summaries)

In contrast, non‑residents are taxed at a flat 20% on Cambodian‑sourced salary, with no allowances or deductions (CBRE).

2. Declaration of Residency: A Must, Not Automatic

It’s important to understand that meeting the residency criteria alone doesn’t automatically change your tax treatment. Both the foreigner (employee) and the employer must formally declare and register the individual’s tax residency status with the General Department of Taxation (GDT). This declaration is essential to activate the progressive tax system and access relevant benefits like deductions for dependents.

Failing to declare can result in continued taxation at the higher flat rate, despite meeting residency thresholds. Moreover, both parties share responsibility for compliance (university.heavnn.io).

3. What You Should Do

If you’re a foreign employee planning to stay in Cambodia long-term (ideally over 182 days in a 12-month stretch), here’s a simple checklist:

1. Track your physical presence carefully—visas, entry/exit stamps, and rental agreements are handy evidence.
2. Coordinate with your employer to file a formal tax residency declaration with the GDT.
3. Ensure both you and your employer complete this process so the progressive tax regime applies moving forward.

This dual declaration ensures you’re properly classified as a resident for tax purposes—and ideally, taxed at the lower, more favorable progressive rates rather than the flat 20%.

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