- Law on investment of Cambodia declared by Reach Kram No 03 NS dated on 05 August 1994.
- Law on the Amendment to the Law on Investment of the Kingdom of Cambodia, promulgated by Preah Reach Krom No. NS/RKM/0303/009 dated March 24, 2003.
- Sub-decree No. 111.ANK.BK dated 27 September 2005, on the implementation of Law on amendment of law on investment of Cambodia
- Circular No. 110 dated January 27, 1999 on Implementation of VAT on inputs imported by export garment factories
- Prakas No. 311. MEF.BK dated March 19, 2014 on Implementation of Value-Added Tax (VAT) for Supporting Industry or Contractor that Supplies Goods or Service for Serving the Export of the Garment Industry, Textile Industry, Footwear Industry, Carry-Bag and Handbag Industry and Hat Industry
- Prakas No. 105. MEF dated 15 February 2008 on Management of Goods Exempted from Duties and Taxes
- Letter No. 393 GDCE dated March 26, 2015 on Implementation of special tax on some import goods which are the input of the production of the garment sector and garment supporting industry
- Letter No. 758 GDCE dated Jun 4, 2015 on Implementation of special tax for import of some goods which are the input of the production and the export supporting industry of qualified investment project investors.
According to the Law on Investment of the Kingdom of Cambodia, Only Qualified Investment Projects are entitled to the benefits subject to the scope of this Law. Qualified Investment Project, abbreviated to “QIP”, is the investment project which has received a Final Registration Certificate. To be admitted as a QIP, the investor has to register the investment project with the Council for the Development of Cambodia (CDC) or Provincial-Municipal Investment Sub-Committee (PMIS) and receive a Final Registration Certificate (FRC).
Qualified Investment Project has three categories: 1) Domestic Qualified Investment Project, 2) Export Qualified Investment Project, and 3) Supporting Industry Qualified Investment Project.
Exemption of Customs Duties and Taxes
a. Exemption of Customs Duties
Conforming to the Sub-Decree No. 111 on the Implementation of the law on the Amendment to the Law on Investment of the Kingdom of Cambodia, a QIP shall be entitled to the exemption, in whole or in part, of customs duties based on each category of QIP as follows:
Domestic QIP refers to a QIP that does not aim at export. Production Equipment and Construction Materials imported by a Domestic QIP are exempt from Customs Duties. In the case where the QIP has a capability to directly export any portion of its manufactured products or has supplied for export industry, the quantity of Production Inputs that were taxed at the time of import and later used to produce goods directly or indirectly exported shall be entitled to customs duties exemption after a review of the quarterly report.
Export QIP refers to a QIP that sells or transfers a proportion of its product to a purchaser or transferee outside the Kingdom of Cambodia. Production Equipment, Construction Materials, and Production Inputs imported by Export QIP are exempt from customs duties. However, for the QIP which operates under the customs bounded warehouse mechanism, the customs duties exemption shall be in compliance with the law and regulations in force applicable to the mechanism. The processed Production Inputs that have not been exported shall be subject to the payment of customs duties and Taxes applicable at the time of import after review of the quarterly report.
Supporting Industry QIP refers to a QIP that supplies 100% percent of its products to export QIP instead of imported raw materials and accessories. Production Equipment, Construction Materials, and Production Inputs imported by a Supporting Industry QIP are exempt from customs duties. However, in the case where the QIP failed to supply 100% of its manufactured products to the export industry or directly export its products, then the quantity of the QIP’s production inputs used to produce those goods shall be subject to the customs duties and taxes after review of the quarterly report.
b. Tax Exemption
For Export Garment Industry:
- Value Added Tax on imported production inputs is born by the Royal Government (Circular No.110 dated January 27, 1999 on Implementation of VAT on inputs imported by Export Garment Factories).
- Special Tax on imported production inputs for Garment Industry is borne by the Royal Government (Letter No. 393 GDCE dated March 26, 2015 of GDCE).
For Other Export Industries:
- Special Tax on imported production inputs of other Export Industries is borne by the Royal Government (Letter No. 758 GDCE dated June 04, 2015).
For Supporting Industry QIP for Export Industry:
- VAT on imported production inputs and production equipment to directly supply for Garment Industry, Textile Industry, Footwear Industry, Carry-Bag and Handbag Industry and Hat Industry is borne by the Royal Government (Prakas No. 311. MEF.BK dated March 19, 2014 of Ministry of Economy and Finance).
- Special Tax on imported production inputs for Supporting Industry is born by the Royal Government (Letter No. 393 GDCE dated March 26, 2015 and Letter No. 758 GDCE dated June 04, 2015 of GDCE).
Import Procedure for QIP
In order to import Production Equipment, Construction Materials, or Production Inputs with the exemption of customs duties or taxes, QIP shall fulfill following conditions:
- Investors or their representatives shall apply for Master List of imported goods from the Council for the Development of Cambodia (Cambodian Investment Board-CIB).
- After getting approval from CDC or CIB, the above master list shall be submitted to GDCE (Department of Customs Procedure).
- When goods in the above master list are imported, investors or their representatives shall apply for Customs Permit at GDCE (Department of Customs Procedure), attaching with supporting documents such as invoices, packing lists, transportation document, authorized letters, and other related documents if necessary.
- After obtaining Customs Permit, investors or their representatives shall complete the procedure of Customs Declaration as mentioned at point 2.1.1 at office of entry.
Customs Clearance for Export at the Export Customs and Excise Branch
- Instruction No.822 CE dated 12 November 2003 on modification of using customs (bullet) seals for sealing the container door loading exported or imported goods for necessary cases of export office, dry ports and Sihanouk Ville Branch of Customs and Excise.
- Instruction No. 016 MEF.MOC dated 18 August 2004 notification on simplification of export procedures on textile products.
- Instruction No.4683 MEF dated 10 September 2004 on establishment of the conjoint office between the Customs and Excise Unit and Camcontrol Unit.
- Instruction No.741 CE dated 20 July 2007 on exported garment products to the EU Markets Sold to DuPont Co., Ltd no need to mark “Made in Cambodia” on the carton boxes.
- Prakas No. 1447 MEF dated 26 December 2007 on the customs declaration provisions and procedures.
- Instruction No. 835 CE dated 05 September 2008 on withdrawing the samples of the exported garment and textile products,.
- Instruction No.548 GDCE dated 22 May 2009 on determining procedures on customs clearance of the re-importation of the textile and garment products after exportation.
- Prakas No.389 MEF dated 17 June 2010 on organization and functioning of local customs unit.
- Instruction No 1114 GDCE dated on 28 November 2011 on revising the procedures and the requirement of documents for customs clearance of the re-importation of the Textile and garment products after exportation.
- Prakas No.1151 MEF dated 15 September 2015 on providing public services of GDCE of the Ministry of Economy and Finance.
General Procedures for Customs Clearance for Export
Export Branch of Customs and Excise (EBCE) has functions and duties for assisting the GDCE on customs clearance of exports and other duties as prescribed in Praka 4 of Prakas No 389 MEF dated 17 June 2010. Physical inspection of exports at EBCE shall be jointly and simultaneously done by both customs officers and Camcontrol officer by issuing the single joint inspection document called Joint Inspection Report of Garment and Textile Exports (instruction No. 016 MEF.MOC dated 18 August 2004 notification on simplification of export procedures on textile products, jointly issued by the Ministry of Economy and Finance and Ministry of Commerce and instruction No.4683 MEF dated 10 September 2004 on establishment of the conjoint office between the Customs and Excise Unit and Camcontrol Unit, issued by the Ministry of Economy and Finance).
Exported goods subject to the customs clearances at EBCE are goods under the investment scopes loaded at customs temporary storages or at manufacturing premises and other exported goods assigned by GDCE. After physical inspection and goods loaded into a container, customs officer of EBCE and Camcontrol officer shall individually seal a container with customs seal and Camcontrol seal. Customs seal on the right door of the container must be checked and verified with export documents and must be removed of before loading onto other means of transports by competent officers at office of exit (Instruction No.822 CE dated 12 November 2003).
Customs clearance procedures
All exporters shall attach related documents to process customs clearance. For customs declaration processing, please see the procedure of customs declaration.