New Government Regulations Set Property Tax Procedures & Rates

• 30 March 2024
• Property Focus
• 2618 Views

The Ministry of Economy and Finance has announced new regulations governing the management of property tax collection in Cambodia, setting a fixed rate of 10% of total real estate rental fees. This proclamation is outlined in Prakas No. 169 MEF.PrK.PD dated 20 March 2024, aims to streamline property tax procedures and ensure fair taxation across the real estate sector.

This Prakas clarifies that property rent refers to the gross wage contracted or agreed upon with the lessee, reflecting market value. It also stipulates tax rates for various real estate components, such as buildings, structures, industrial mobiles, and land without compensation.

Furthermore, the Prakas defines the tax base for real estate fees, considering both monthly rental income and total rental revenue received by the property owner or entity.

Exemptions from property tax include state property leases of embassies, international organisations, non-profit entities, and rentals below 500,000 riels per month.

In addition to property tax, the ministry has introduced tax declarations and incentives across eight sectors:

1. 5% VAT for taxable products, including alcohol and tobacco.
2. 2% accommodation tax for various types of lodging establishments.
3. 30% income tax on petroleum transactions.
4. 30% income tax on mining operations.
5. Variable tax rates on billboards based on size and type.
6. VAT incentives for agricultural enterprises engaged in the production and export of various crops and animal products.
7. State exemptions for basic food items.
8. Tax incentives for educational institutions, exempting them from income tax obligations.

These comprehensive measures aim to bolster tax compliance, encourage sectoral growth, and contribute to Cambodia’s economic development.

• Laws and Regulation