So what do exchange rates have to do with paying your taxes? And what is the NBC? The answer to the latter question is the National Bank of Cambodia. The NBC is Cambodia’s central bank and its duties include managing the country’s financial policies (including exchange policies) as well as regulating any financial institution and promoting the Riel.
But where does the exchange rate fit in? Well, when you think about it, the exchange rate affects several facets of how we do business every day, so it makes sense that it will also come into play when it comes to your monthly tax declarations and payments. Not all tax declarations have to be submitted by the 20th of each month, so let’s look at May as an example month:
- Your withholding tax calculation will use the NBC’s exchange rate for the last day of the previous month (So in this case, 30th April). This is because the taxes you submit on the 20th May are for business done during April.
- For daily sales, you use the exchange rate for that actual day (this is released early each morning).
- For salary tax, you would use the NBC rate issued on the 15th of the month except when that day is a holiday. If that is the case, then you use the previous day’s rate. If both the 14th and 15th are holidays, then the 13th, etc. So, in this example, for May, you would be using the exchange rate posted on the 15th April.
For many business owners, the issues revolving around exchange rates can be very confusing. Daily rates, snapshots of a monthly rate, holidays, etc. This is another area where TaxKHpro can solve all your problems. Our online software tracks all the relevant rates and applies them where needed; salary tax, sales tax, purchases, etc. And it will even keep track of Cambodian holidays and adjust dates and exchange rates to match. TaxKHpro really is the solution to all your business’s taxation needs.
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Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice.