Owning real estate property, whether you have one or more, comes with it a certain set of responsibilities. Besides maintenance and repair, you need to pay tax for it especially if the value of your property exceeds more than $25,000 in value. This is the case for Cambodian laws wherein Tax on Immovable Properties (TOIP) less than that value or 100 million riel is non-taxable.
Take note that the property tax you pay depends on the type of property you have, its location, and current market value according to the established price by the Ministry of Economy and Finance.
Once your property tax has been calculated, the deadline for declaring and paying your property tax annually is only until September 30. This is set by and monitored by the General Department of Taxation (GDT) in Cambodia. Tax declaration for real estate can be done directly at GDT, their software application available on Play Store and App Store called GDT Taxpayer App, or even at any provincial tax branch.
Failure to declare and pay your property taxes on time will be punishable according to the full extent of the law. When you pay your taxes past the deadline, here are the penalties you might incur:
- You can get a 10% to 40% increase on your property tax if you pay late
- You can get an additional 2% interest per month of the tax if you underpay it or file it late
- If you have a tax deficit of less than 10% due to negligence, then you need to pay about 10% of your tax that you haven’t yet paid. This is Section 9 Article 125 under Negligence in the Law on Taxation
- If you have a tax deficit of more than 10% due to serious negligence, then you need to pay 25% of your tax that you haven’t yet paid. This is Section 9 Article 126 under Serious Negligence in the Law on Taxation
- On the other hand, if you have violated the Section 9 Article 126 Serious Negligence portion two times in three years or two to three times, then you need to pay 40% of the unpaid property tax.
Take note that the declaration and payment of your property tax usually ends every September, however the GDT can make an official announcement to move the deadline. For example, in 2016, the deadline for property tax submission was moved to October. This means you have to check first thing yearly when the deadline is to make sure you are not penalized with late tax declaration.
Additionally, any time that your property has gone through a massive renovation like increasing in square meters, got demolished, changed ownership, and more that can cause its value to increase or decrease, you need to declare this immediately to the GDT. It’s important you do this since if you declare and pay the wrong tax, you might get penalized once the department discovers the incorrect filing. If you want to learn more about property tax in Cambodia and how to calculate it, continue checking out IPS Cambodia’s latest news & trends.