Updated on November 14, 2023
After getting pushed back due to the pandemic, capital gains tax (CGT) in Cambodia was again delayed for the fourth time and will be in place by the end of 2024. The reason for postponement is aimed at boosting economic growth and attracting investment. In addition to this, the government has also extended tax incentives in key sectors such as agriculture and tourism, recognizing their crucial contribution to Cambodia’s economy.
These reforms are expected to have a positive impact on the private sector, particularly those involved in agriculture, tourism, and real estate in Cambodia. With the postponement of Capital Gains Tax, the financial burdens faced by businesses in these sectors will be eased and will create more opportunities for increased investment. Furthermore, the reforms are also expected to encourage compliance with tax regulations, fostering a more supportive and conducive business environment overall.
DEEP DIVE: How Does the Capital Gains Tax in Cambodia work?
Capital gains tax to be carried out by the end of 2024
This means that a 20 percent tax will soon be required from individuals selling or transferring titles of capital assets such as land, properties, leases, and financial holdings.
Local businesses have always been subject to CGT, making the upcoming arrangement simply an expansion of the tax law.
This was announced by the Department of Property and Real Estate Tax at the General Department of Taxation (GDT). The initial introduction of this tax had been done by the Ministry of Economy and Finance in April last year.
According to the law drafted by the GDT, the CGT shall apply to both resident and non-resident taxpayers for immovable properties, leases, investment assets, intellectual property, and foreign currency.
It is levied on profits gained upon sale or transfer of titles and will give the seller three months to pay. In cases where no profit is made, the seller will not be obligated to pay CGT.
As the expanded law has been in talks for over a year now, taxpayers will have had sufficient time to prepare and educate themselves on this new fiscal responsibility.
Additional tax revenues will also benefit the Kingdom by offsetting lost tax revenues from pandemic-related economic decline.
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