January 2022 has seen the issuance of Instruction No. 002 AAR.N (“Instruction 002”) on the Compulsory Submission of Annual Financial Statements to the Accounting and Auditing Regulator (“ACAR”) and Instruction 001 AAR.I regarding the Submission to the ACAR on the use of English for computerized or other accounting systems (“Instruction 001”).
We set out the salient points with respect to Instruction 002 and Instruction 001 below for your reference.
Instruction 002 – dated 27 January 2022 – Submission of Annual Financial Statements
On 25 May 2021, the National Accounting Council (“NAC”) issued a reminder notification with respect to the obligations of enterprises to submit their 2020 annual financial statements for an independent audit and to submit their audited financial statements to ACAR in line with the Law on Accounting and Auditing 2016 and Prakas No.563 MEF.Prk dated 10 July 2020 on the Obligation to Submit Financial Statements for Independent Audits (“Prakas 563”). To read more about which enterprises are required to obtain an independent audit and submit their audited financial statements to ACAR please refer to our earlier update here.
Instruction 002 that was issued on 27 January 2022 takes the obligation to file annual financial statements with ACAR a step further to now expand the filing obligation to all enterprises including those that do not meet the criteria contained in Prakas 563 to submit audited financial statements to ACAR from the 2021 period onward.
Those enterprises affected by Instruction 002 are obliged to submit their annual financial statements with ACAR within 3 months and 15 days from the close of their accounting period. For most enterprises that close their accounting period on 31 December the due date for the first submission of their annual financial statements to ACAR will be on 15 April 2022.
Enterprises are able to use the ACAR e-filing system to submit their annual financial statements which can be found at https://www.acar.gov.kh/. The public service fees to be paid for the retention of financial statements in accordance with Prakas No. 001 BBFSA dated 12 January 2022 are as follows:
| No. | Description | Fee (KHR) per year |
| 1 | Enterprises that have an obligation to submit audited F/S | 300,000 |
| 2 | Enterprises that do not have an obligation to submit audited F/S | 200,000 |
| 3 | NGOs that have an obligation to submit audited F/S | 100,000 |
| 4 | NGOs that do not have an obligation to submit audited F/S | 60,000 |
Those enterprises that fail to submit their annual financial statements in time to ACAR as per Instruction 002 will be subject to penalties as provided in Sub-Decree no. 79 dated 1 June 2020. Sub-decree no. 79 prescribes a penalty of Khmer Riel 2 million (USD500) and Khmer Riel 1.5 million (USD375) for Large and Medium taxpayers respectively that fail to, or are late in, submitting their annual financial statements to NCAR.
Instruction 001 AAR.I – Dated 27 January 2022 – Use of English Language
Circular 009 dated 1 September 2021, which came into effect from 1 January 2022, provided guidance for enterprises and non-for-profit organizations with respect to the use of English in accounting systems, related software and supporting documents – please refer to our earlier update here for further details.
With respect to the implementation of Circular 009 the ACAR issued Instruction 001 which provides the following:
- Registered enterprises looking to use English language in their computerized accounting systems and/or other relevant computerized systems are required to notify ACAR before 31 March 2022. Newly established enterprises shall submit a notice on the use of English in their computerized accounting system and/or other relevant computerized systems to ACAR within 60 (sixty) days from the date on which they are registered with the General Department of Taxation;
- Enterprises can use the e-filing system of ACAR to submit the notice on the use of English in their computerized accounting system and/or other relevant computerized systems according to the sample already provided in the e-filing system;
- Enterprises should take the following steps to submit the notice to ACAR:
Step 1: Open an account on the e-filing system of ACAR;
Step 2: Complete the general information boxes then save;
Step 3: Click on “Notice of the use of language” then fill out additional information and download the notice form to fill out information on the use of language by specifying the name of the accounting system, company name, and country of origin, and the language used in the computerized accounting system, and upload the form through the e-filing system.
Enterprises should retain the original copy of the notice at their locations for disclosure to the ACAR in future inspections.
Those enterprises that use English in their computerized accounting system and/or other relevant computerized systems without submitting a notice to the Accounting and Auditing Regulator by the deadlines set above shall be subject to a penalty according to Sub-decree No. 79 S.E., dated 1 June 2020. Under Sub-decree 79 the failure to use Khmer language in accounting records and financial reports and use of another currency beside Khmer Riel in accounting records and financial reports are subject to respective fines of Khmer Riel 2 million (USD500) and Khmer Riel 1.5 million (USD375) for Large and Medium taxpayers respectively.
Please contact the author or your usual DFDL advisor if you require further assistance with this update.
Please also refer to our related updates:
Tax services required to be undertaken by a licensed tax agent in Cambodia are provided by Mekong Tax Services Co., Ltd, a member of DFDL and licensed as a Cambodian tax agent under license number – TA201701018.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
