GDT calls on corporates to abide by Transfer Price Law

 The General Department of Taxation (GDT) yesterday called on all corporations to abide by the Transfer Pricing Law. Transfer pricing is described as the price at which divisions of a company transact with each other, whether it is the trade of supplies, labor, or any other commodity. In Cambodia, the law was introduced in 2017 to combat perceived abuses by companies that lead to loss in tax revenue for the country. However, few companies have submitted transfer pricing declarations to the nation’s tax body and general awareness of the concept remains low, according to Traing Lay, director of GDT’s advanced pricing arrangement and transfer pricing bureau. Cambodia has been relatively slow in tracking transfer pricing and is now seeking to catch up with its Asian neighbors in terms of regulation and auditing, he said. Say Sokheng, head of the regional accounting and consulting practice group at DFDL, said that a lot of companies operating in Cambodia are multinational corporations with headquarters in another country. Before these firms could report an expense incurred in Cambodia under the name of the parent company to avoid paying taxes in the Kingdom. However, under the 2017 law, this practice is illegal and punishable, he added. (Source: Khmer Times)