Capital Gains Tax (CGT) delayed to 2024 by the General Department of Taxation (GDT) to allow industry to recover from the pandemic, particularly those in the textile and garments, and tourism sectors.

From 1 January 2024 the CGT will be implemented and enforced. Set at 20% of the amount of gain realized (subject to deductions). It is to be reported and paid within three months of the transaction date relevant to the capital gain. It initially appeared in Prakas 346 (1 April 2020) following which the GDT provided guidance on its implementation. So far, it has been delayed a few times for various reasons.

In short, a transaction made after 1 January 2024 is liable if it refers to immovable property, finance leases, investment assets, goodwill, intellectual property, and foreign currency. This will apply to all taxpayers (both residents and non-residents including legal entities and nonresident individuals) that realize capital gains. Exemptions are available.

Conditions for Capital Gains Tax exemptions:

  1. The facts leading to the charge or expense have verifiable evidence;
  2. The results of economic activities related to the expense; and
  3. Invoices or documents as evidence to support claimed expenses.

CGT deductions:

For immovable properties, taxpayers can choose between:

  1. The limited expense method (whereby 80% of sales proceeds are deducted)
  2. The actual method (whereby actual expenses are deducted)

For other capital, taxpayers must only use the actual expense deduction method.

Important note: Where actual expense deductions exceed the sale proceeds (i.e. a capital loss) this amount cannot be deducted from other assets. Taxpayers must file and pay for each transaction within three (3) months following the receipt of a capital gain. A declaration format will be determined by the GDT .

Documentation required:

  1. Identification card, birth certificate or passport (for foreigners);
  2. Family book, residency book or residence certificate (local residents);
  3. Certificate of principal residence of the taxpayer;
  4. Proper title and identification papers issued by the cadastral office or relevant documents verified by the commune / Sangkat level authority and above, or recognition documents from the competent authority;
  5. Purchase sale contract (SPA) or exchange contract or donation agreement;
  6. Payment invoices and other expenses invoices;
  7. Other relevant documents related to the sale or transfer of capital.

Important note: Resident tax payers making capital gains on property located outside of Cambodia must pay the additional amount on the tax rate variant that is less than Cambodia’s rate.

Who benefits from this delay?

The biggest beneficiary of this delay is likely to be those in the real estate sector as foreign buyers and developers see the tax postponement as an opportunity to minimise costs. This is no small matter as foreign investment in Cambodia’s construction sector reached US$9 billion in 2019. This trend didn’t abate until the pandemic struck, nonetheless in 2021 almost 4,000 projects were approved at a value of around US$10.35 billion. 90% of these were classified residential, most of which were in Phnom Penh.

This is not surprising given land values in the capital have experienced an annual growth rate of around 10% in the CBD and inner suburbs, and a healthy 20% in the outer suburbs and Sihanoukville, where values increased 100% over 5 years leading up to the pandemic, largely on the back of Chinese investments.

A subset of the real estate sector likely to benefit from the delay are individual investors and property ‘improvers’ who profit from buying and selling properties that are not their main place of residence. This is because the CGT is exempt for individuals selling property that has been their primary residence for 5+ years before the sale.



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