Withholding Tax on Non-Resident: Payment of Management Fee and Technical Services
Some registered companies in Cambodia may use services from other countries for companies, so local companies must withhold tax on these services before payment otherwise companies will pay withholding tax on services on behalf.
Withholding Tax on Non-Resident for Payment of Management Fee and Technical Services is subject at 14%.
Examples for Payment of Management Fee and Technical Services are as follows.
– Consulting service
– Technical training
– Management fee
– Other services
Example
ABC Company is registered at Cambodia, and ABC Company used service from Foreign Company for management training in Cambodia. Management training fee is $3,000.
Required:
1. Calculate withholding tax (WHT )
2. Make Tax and Accounting record if any
Solution
1.Calculate WHT
WHT = $3,000 x 14%=$420.
Withholding tax on management training is $420.
2.Make Tax and Accounting record
Dr. Training expense……3,000
Cr. Cash……………………………2,580
Cr. WHT payable………………..420