Our new year’s resolution over here at MTC HQ was to finally launch the monthly Move to Cambodia newsletter. While we toil away on that, please sign up now to ensure that you won’t miss our monthly newsletter which will be packed with Cambodia expat info, reviews, tips and travel information.
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If you’ve been following the news, you might be worried about visiting Cambodia right now. Protests by the opposition party (CNRP) have been going on since the August election that left the ruling party (CPP) with a thin margin of votes, a thin margin that the CNRP says they didn’t actually receive. Over the last week, though, garment factory strikes turned into violent demonstrations, and the government used force to clear Phnom Penh’s Freedom Park of protesters. So, what does this mean for you, you might wonder?
Phnom Penh is in a state of alert, but a drowsy sort of alert.
Very little. While this may seem like the end of days for those reading the long-term expat Ken Cramer, who has seen this sort of thing before.
While the protests in Phnom Penh’s Freedom Park were going on over the last few days, I walked around the riverside, the city’s main tourist area. Had I not known about the protests, I would not have realized anything was out of the ordinary–everything in Phnom Penh is completely business as usual. Restaurants, bars and movie theaters are open and tourist attractions are not currently affected.
It’s important to note that while some of the protests have turned violent, no tourists or expats have been targeted. Both the CPP and CNRP are well aware that tourism drives Cambodia’s economy and no one wants to do anything to endanger those tourist dollars. So even when protests are happening at Freedom Park, the tourism industry has been entirely unaffected. The garment factory demonstrations have been the most violent, with several strikers being killed, but this took place outside of central Phnom Penh, in an area no tourist would ever find himself.
The best advice we can give is that visitors should avoid the protest areas and if they see anything that looks like a demonstration, protest or large group of people, it’s best to avoid the scene. Yesterday the protests were banned, and citizens are not allowed to gather in groups larger than ten people, but it remains to be seen if these rules will be followed. If you do see a protest, going to take photos, watching or getting involved is not advised, because when billy clubs start swinging they’re just as likely to crack your melon as anyone else’s.
Right now all of the protests are happening in Phnom Penh and Siem Reap, Kampot, Kep, and Sihanoukville are entirely unaffected. In Phnom Penh the worst that tourists may experience is some slight traffic delays when there are marches happening, but even those are fairly minor.
It’s likely going to be several weeks before the next stage of Cambodia’s political future becomes clear. If the situation does escalate, we’ll revise our advice at that time, but for now, don’t worry about coming to Cambodia.
In today’s post, Move to Cambodia talks to David McKeegan, the co-founder of Greenback Taxes, a firm that specializes in preparing US tax returns for American expats. I’ve personally used Greenback since I moved to Cambodia and have been very happy with the work they have done and most importantly, their level of responsiveness. If you’ve used bigger firms for your taxes, you’ll know how much that means (PwC I’m looking at you). Greenback Taxes is the first Move to Cambodia advertiser–but only after I had already been a happy customer for my last two tax returns.
If you’re an American in Cambodia or an American planning on moving to Cambodia, listen up. David has answered all of your tax-related questions here (and if you have more, please feel free to leave them in the comments).
As an American expat in Cambodia, what are my responsibilities in regard to paying taxes?
“Americans living in Cambodia are required to file a US tax return each year. The US taxes its citizens on worldwide income, so any income you earn in Cambodia is subject to US taxes. Fortunately, those that qualify as a resident of another country (through the Physical Presence test or the Bona Fide Residence test) can utilize several deductions and exclusions to offset their tax liability:
The Foreign Earned Income Exclusion – This allows you to exclude up to $97,600USD of yearly income
The Foreign Tax Credit – This is a dollar for dollar credit for the taxes you pay in Cambodia.
The Foreign Housing Exclusion – This allows you to deduct a certain amount of your housing expenses to offset the cost of living abroad.
In addition to US tax obligations, Cambodian residents are subject to Cambodian taxes on their worldwide income; non-residents are taxed on their Cambodian-sourced income only. For tax purposes, a resident is someone who has their principal abode in Cambodia or is present for more than 182 days in any period of 12 months ending in the current tax year.
Both residents and non-residents are subject to Cambodian Taxes on Salary (ToS). ToS includes salary, remuneration, wages, bonus, overtime, compensation and fringe benefits as part of your taxable income. Taxes are withheld by your employer so you do not need to file a Cambodian tax return. However, self-employed individuals must file a yearly tax return.”
I’ve heard that if I don’t make that much money in a year, I don’t have to pay taxes. Is that true?
“US citizens must file a tax return if their income is above a certain threshold, even if there is no tax liability. It is indeed possible, and likely, that you won’t pay any US taxes while living abroad.
It is also possible you won’t pay any Cambodia taxes if you make a small amount of money. Cambodian residents earning 500,000 KHR or less per month, pay a Cambodian tax rate of 0% and do not owe taxes on salary. But from there, tax rates are progressive depending on your income, ranging from 5% to 20%. It’s important to note that a flat tax rate of 20% applies to non-residents.”
What if I’m self-employed?
“For self-employment or investment income, 6,000,000KHR or less per year is exempt from tax. Above this threshold the rates are progressive, ranging from 5% to 20%.
For those who are self-employed, it is important to note that even if you don’t owe taxes to Cambodia, your income must be reported on your US tax return. This may result in taxes being owed to the US. Self-employment tax, for example, is assessed based on your gross income before you apply the Foreign Earned Income Exclusion or other deductions.”
If I don’t owe any taxes, why should I file a tax return?
“Americans living abroad whose income is above a certain threshold are required to file a US tax return each year, regardless of whether or not they will owe American taxes. Currently the thresholds are:
Single with income over $9,350
Married filing jointly with income over $18,700
Married filing separately with income over $3,650
In addition, it’s important to note that you may need to file a state tax return, depending on the state you resided in prior to your move overseas.”
What is FBAR (Foreign Bank Account Report) and how does it affect expats in Cambodia?
“All US citizens are subject to FBAR filing if certain thresholds are met. Any US taxpayer with $10,000 or more in foreign bank accounts at any point in the tax year must disclose this money through an FBAR form. This is a cumulative account total, so if you have 3 different accounts that total $10,000 or more, you will be required to file. As of September 2013, all FBAR forms must be filed electronically–no paper filings will be accepted. Penalties for failing to file FBAR when required are steep, so it is important to disclose your account balances if you meet the threshold.”
If I haven’t filed a tax return in several years, what should I do? Will I get in trouble?
“If you haven’t filed US taxes in several years, it is important to get caught up as soon as possible. While you may not actually owe taxes to the US, you still have filing requirements. It is especially important to get current if you are subject to FBAR filing, as the penalties for failing to do so can be steep. If you are behind in FBAR filings or believe you owe taxes to the US, there are two programs available to help you.
The Streamlined Program is for low-risk taxpayers who do not owe more than $1500 in taxes for any tax year. The Offshore Voluntary Disclosure Program (OVDP) is suitable for those who owe a greater amount of taxes or are significantly behind in FBAR filings. While acceptance to this program comes with hefty penalties on balances owed, you will likely avoid any criminal prosecution that may result from your delinquency.
A view off the pier at Koh Totang, Cambodia.
This isn’t the first time I’ve posted a beautiful photo of Koh Totang, and it’s unlikely to be the last. I’ve spent a lot of time on the islands off of Cambodia’s coast, but Koh Totang was particularly picturesque. Almost entirely deserted save for one set of eco-bungalows at a place called read her review here) and the place was so beautiful that we took hundreds of photos between the two of us. As we were about to get into the boat to take us to shore, I stopped to take a few snaps off the pier. Aren’t you tempted?
Brits and Anglophiles are sure to rejoice when they hear the news that Waitrose products having been appearing on the shelves of Lucky supermarkets in Cambodia. The UK grocer is known for their high-end and expensive groceries (think Whole Foods) but also offer a more affordable line of Waitrose-branded items. Their store-branded line as well as the Cooks’ Ingredients and Prince Charles’ own Duchy Originals are being carried in Cambodia.
Products spotted have included an extensive collection of dried and canned beans and legumes–including several that were previously unavailable in the Kingdom of Wonder–honey, mayonnaise, salad dressing, cereal and muesli, tea, sauces, marmalade, lemon and orange curd, chutneys, jams and jellies, baking ingredients including the long awaited baking powder and cream of tarter, dried soups, capers, peppercorns and pickles. Prices are marginally higher than they cost in the UK, but are still quite reasonable ($1.95) for a can of imported beans. I’ve heard reports that some items are actually cheaper than in the UK, but was unable to confirm. Honestly, it all seems too good to be true. I would suggest buying as much as possible as quickly as possible, both to encourage Lucky to buy and stock even more products and as a hedge against the possibility that this is a one-time shipment.
In the Move to Cambodia book, I recommend Cellcard’s INET3 data plan for iPhone, Android and other smart phones. At the time the book was written, it cost $5/month for 2GB of data. Since then, a few things have changed, and it’s all good news.
More data than your smart phone can handle!
Cellcard is still offering the INET packages, but they’ve raised the data limits. If you just need data on your phone for one day you can use INET1, which gives you 250MB for 24 hours. INET2 offers 1GB for 7 days for $2. And these days INET3 offers a cool 3.5GB for just $5 a month. You can get any of these plans on your Cellcard phone by texting INET1, INET2 or INET3 to 6767.
Cellcard has also changed their APN settings. If you need to set the APN on your phone to use data, they’ve eliminated the username and password. The new setup is:
APN: Cellcard
Username:
Password:
But wait, there’s more! Cellcard is now offering a new set of data packages, Cellcard XG. They’re similar to the INET plans, except for the same price you get the addition of unlimited same-network texting, some free off-network texts, and free same-network call minutes. So if you’re already on one of the INET packages, it’s worth switching over. Check out their info page for all of the details, but this expat has chosen to go with XG5 which offers 100 free on-net minutes, unlimited on-net SMSs, 15 off-net SMSs, and 3.5GB of data. To sign up, dial #8181#3#2# from your Cellcard phone.
The higher plans also seem like a good deal, with 11GB for $15, or 15GB for $20. Recently Metfone–which many use for home Internet with a data-only SIM and a USB 3G modem–has lowered their $20 data plan from 12GB to 10GB, which seems ludicrous considering the competition they are getting from Digi and Opennet, so it seems likely that those of us who are still going the USB 3G modem route will end up switching to Cellcard.
Cellcard
33 Sihanouk Blvd, Phnom Penh
T: 012 800 800
cellcard.com.kh
To celebrate the new year, we’ve updated our ‘Getting Around by Tuk Tuk‘ page, a comprehensive guide to taking tuk tuks in Cambodia including prices, how to bargain (and when not to), give directions in Khmer, and just generally enjoy one of the best forms of transport in Southeast Asia.
We’re going to be updating other info around the site, so if there’s a feature you think could use a little refreshing, please drop us a line.
A Cambodian barber plies his trade near Wat Ounalom.
This photograph was taken by recent arrival and photographer Lucas Veuve. Here’s the story behind the photo:
“Like many street in Phnom Penh, a few young men have set up barber chairs near Wat Ounalom, complete with ageing posters of Tom Cruise and Brad Pitt. They offer their skilled hair-cutting services for a dollar. My hairdresser was extremely attentive and thorough, but when I could hear the clippers rapidly running out of power and with no power socket in sight, I grew apprehensive.
I imagined myself going home with half a haircut. However, the clippers soldiered on and my barber, a part-time university student, did a great job and even gave me a fresh cold towel at the end. What a nice touch! For $1, it’s an absolute bargain.”
Lucas Veuve is a freelance travel and humanitarian photographer based in Phnom Penh. For more information on his work, visit his website, Facebook or Twitter.