Cambodia Mandates Khmer Riel Bank Accounts for VAT Refund Applications

The Ministry of Economy and Finance has recently introduced significant changes to the Value Added Tax (VAT) refund process through Instruction No. 030 issued on 24th December 2024.
This new instruction establishes a requirement for Khmer riel (KHR) bank accounts for medium and large taxpayers as well as foreign diplomatic missions, consular offices, international organizations and other governmental technical cooperation agencies, which seek VAT refunds.

Key Requirements:

Mandatory KHR Bank Account: Applicable entities must maintain a bank account denominated in Khmer riel that is properly registered in the General Department of Taxation (GDT) management system specifically for receiving VAT refund payments.
New Account Requirements: Entities that do not currently hold a KHR bank account must open one and update their banking information with the GDT to continue receiving VAT refunds.

Transition Period for Foreign Entities:

Foreign diplomatic and consular missions, international organizations and other governmental technical cooperation agencies that have not yet established KHR bank accounts have been granted a grace period.
These entities will continue to receive VAT refunds through existing channels until 31st December 2024.

Implications for Businesses:

This regulatory change represents Cambodia’s ongoing efforts to promote the use of its national currency in business transactions and governmental processes. Medium and large taxpayers operating in Cambodia should take immediate steps to comply with this requirement to avoid disruptions in their VAT refund processes.
We recommend that affected entities consult with their banking partners and tax advisors to ensure timely compliance with these new requirements.