Those contemplating a move to Cambodia because of fear of the Thai Revenue Department are on safe ground as matters stand. Foreign retirees in Cambodia are not being taxed on their international transfers: officials at ABA and Maybank, two leading banks with foreign customers, said the subject was not currently being discussed. The Cambodian government in its tax-related publications clearly avoids the specific issue of retirees.
The Ministry of Foreign Affairs and International Cooperation states that a foreigner spending more than 182 days in the kingdom during a year is deemed to be a “resident” of the kingdom. The text continues that “residents” are taxable on their worldwide income and there is no qualifier that the cash must be remitted to Cambodia to be liable. There is a separate government requirement that sums exceeding US$10,000 must be declared to the Bank of Cambodia before the transfer.
However, the context of the tax-liability discussion relates to “resident” foreigners who are working in Cambodia with a “salary”. The regulations state that their overseas income, if already taxed in the home country, can be credited against any further Cambodian Revenue demands. This ruling is not dependent on double taxation treaties. Cambodia has eleven DTAs but none with a country outside Asia. In other words, working expats are subject to taxation on their actual wages both in Cambodia and abroad.
Given that companies submit tax returns in Cambodia, individuals do not normally prepare their own returns. Technically, Cambodia does not have personal income tax but is concerned only with cash actually being earned. By extension, there is no requirement for retirees to get involved with Revenue matters and websites promoting Cambodia as a tropical paradise seldom even mention the subject of taxation.
The question is whether the tax-free haven for retirees could change. It would not be difficult for the government to do so, for example by divorcing worldwide income from the need to have a “salary”. However, there is no indication of that intention and the Cambodian revenue authorities are much less proactive and influential than their Thai counterparts. As a Phnom Penh bank official said, “It simply wouldn’t be worth the effort”.
The Cambodian retiree visa costs around US$300, annually renewable, but must be based on a an initial E-class (formerly business) 30 days visa when entering the country. The use of visa agents is widespread, almost compulsory in fact, and very little documentation is required. Proof of retiree status and of steady income is sometimes called for. There is also the requirement to download the Foreigners Present in Cambodia address registration app. In other words, the retiree bureaucracy in Cambodia is much easier than in Thailand. Of course, the pros and cons of living over there are a much bigger agenda.
