The implementation of the capital gains tax has been delayed for another two years to reduce the impact of the pandemic on the property market as the government rolls out a series of stimulus packages for economic recovery.
The Ministry of Economy and Finance said in an announcement dated March 9 that the ministry has submitted a request to Prime Minister Hun Sen to extend the implementation of the capital gains tax.
Mr. Hun Sen accepted the request, the ministry said.
The implementation of the capital gains tax is fixed from January 1, 2024, read the press release.
“The Royal Government has decided to postpone the deadline for the implementation of the capital gains tax by two years, setting the implementation of the tax for 1 January 2024 to implement the policy framework and the economic stimulus programs in the context of living with Covid-19 in a new normal 2021-2023,” the ministry said.
The capital gains tax was previously scheduled to be implemented on January 1, 2021.
Due to COVID-19, the law was postponed until January 2022 to reduce the impact of the pandemic on the real estate market.
Capital gains tax in Cambodia is not really new, as companies in the Kingdom have always paid capital gains. The material difference now is that it applies to individuals, especially those looking to sell real estate – real estate.
Capital gains tax covers capital derived from the sale: real estate, leases, investments/financial assets, property (licenses and branding), intellectual property and foreign currency.
Capital gains tax in Cambodia is a flat rate of 20% on gains realized after the sale of a capital asset. At face value, this represents a significant portion of sales proceeds. Still, there are two methods that taxpayers can use to account for their expenses a little more – the actual expense deduction method and the determination-based deduction method.
- Key words: Capital gains tax, economic recovery