Uncertainty Surrounds Implementation Timeline for 20% Capital Gains Tax in Cambodia

• 2 October 2023
• Property Focus
• 1835 Views

Cambodian Prime Minister, Samdech Hun Manet, has affirmed that the government has yet to establish a definitive timeline for the implementation or adjustment of the capital gains tax in 2024. This revelation, as conveyed by PM Hun Manet on 27 September 2023, has brought some respite for those monitoring this fiscal development.

PM Hun Manet further elaborated that in light of the new government formation, no concrete tax framework has been introduced thus far. In an endeavour to foster transparency and facilitate constructive dialogues with the private sector, the government intends to host a government-private forum in November. This forum aims to review potential measures that can bolster the private sector ahead of the impending implementation of the capital gains tax law.

The clarification comes in the wake of the General Department of Taxation’s (GDT) announcement on 26 September 2023, reaffirming the imposition of a 20% capital gains tax on real estate transactions. However, this tax has been deferred until the close of 2024. Notably, it’s important to highlight that this tax is not a novel addition, as the government first introduced it back in 1997.

Furthermore, the GDT emphasised that, having deferred the implementation thrice, the government has resolved to reinstate this tax from 1 January 2024. However, this tax will only apply to five specific categories of capital assets, including leases, investment assets, business reputation, intellectual property, and foreign currency. (Read more)

Of particular note, profits generated from the sale of state-owned real estate have been granted an extension until the conclusion of 2024. This extension is viewed as a substantial measure to bolster and provide additional support to the real estate sector.

The state has been imposing this capital gains tax on legal entities since 1994, requiring companies and enterprises to pay income tax that encompasses capital gains. Thus, all enterprises operating in the real estate sector have been subject to this tax as well.

• Laws and Regulation