Cambodia Discusses Tax Obligations for CMT/FOB Enterprises and Enhanced Investment Incentives

On the afternoon of July 23, 2026, His Excellency Lim Visal, Deputy Secretary-General of the Council for the Development of Cambodia (CDC), participated as an honorary speaker in a discussion on "Tax Obligations for CMT (Cut, Make, Trim) and FOB (Free on Board) Enterprises and the 150% Deduction of Expenses from the Tax Base on Certain Specific Expenses." This event was part of the 2026 Tax Forum held at the headquarters of the General Department of Taxation. During the occasion, His Excellency the Deputy Secretary-General explained and presented the background and differences between CMT enterprises, which are contract factories that receive production inputs from buyers, and FOB enterprises, which are responsible for the entire production chain from ordering raw materials to shipping the goods. He also elaborated on the criteria for qualified investment projects that are eligible for customs duties, special taxes, and value-added tax exemptions borne by the state, to avoid misinterpretations of the spirit of the existing legal documents. Furthermore, His Excellency provided a detailed explanation of the additional incentive measures under the Law on Investment of the Kingdom of Cambodia and related provisions. This includes allowing qualified investment projects to deduct expenses at a rate of 150% from the tax base for certain priority activities. These activities encompass research, development, and innovation; human resource development; construction of accommodation, canteens, and nurseries; transportation means; modernization of machinery serving the production chain; and investment in waste treatment infrastructure. To be eligible for these incentives, enterprises must meet essential conditions, including proper registration with the CDC or provincial-city investment committees, the occurrence of expenses, the realization of actual economic activities, and the maintenance of accounting records and clear invoices or supporting documents to verify actual expenditures. Source: CEN Cambodia