Cambodia’s Ministry of Economy and Finance has announced Prakas 574 on 19 September 2024 introducing revised transfer pricing regulations, which went into force on 1 January 2025.

The key changes include:

Updated definition of “related party”

It now includes entities that control, are controlled by, or share common control with the taxpayer (typically 20%), as well as permanent establishments and their non-resident owners. In addition, new regulations have been introduced to align profit attribution to permanent establishments under OECD Transfer Pricing Guidelines.

New arm’s length range regulations introduced

There won’t be adjustments to controlled transactions if a relevant financial indicator analysed by an appropriate transfer pricing method falls within the range.

New provisions on transfer pricing adjustments

New provisions on transfer pricing adjustments include primary adjustments and secondary adjustments. Taxpayers may use transfer pricing documentation from a previous year if no significant changes in controlled transactions or comparability factors affect the transfer pricing method.

Transfer pricing documentation exemptions

Taxpayers in Cambodia won’t be required to prepare transfer pricing documentation for loans if they provide supporting documentation under Instruction No. 10979 GDT and meet specific conditions (excluding financial institutions).

Furthermore, taxpayers are exempt from transfer pricing documentation if their annual turnover is below KHR 8 billion and their total assets are under KHR 4 billion. Taxpayers also don’t need to provide transfer pricing documentation if the total value of controlled transactions (excluding loans) is less than KHR 1 billion for goods, services, and other transactions.