9 December 2020

Any profits made on the sale or transfer of a capital asset will now be taxed for capital gains in Cambodia. This tax will be implemented beginning 1 January 2022 as confirmed by the General Department of Taxation (“GDT”) on 22 October 2020 in Notification No. 24094. Upon implementation, any such sales or transfers will not have full legal effect unless and until the Capital Gains Tax (“CGT”) for that transaction has been settled.

Although the Ministry of Economy and Finance (“MEF”) recently issued Prakas No. 346/20 on Capital Gain Tax (the Prakas) clarifying on the CGT regime in Cambodia, the tax on capital gains is not a new concept under Cambodian tax law. Article 7 of the Law on Taxation (last amended in 2003) includes “capital gains” made from the sale of an asset or various parts of an asset within business operations as taxable profit under the Tax on Profit regime.

Types of capital assets that are taxable

The Prakas defines “capital gains” as taxable income derived from income generated from the sale or transfer of a capital asset minus allowable expenses. There are six types of capital assets which are taxable for CGT. These include:

  • immovable property (land, buildings, and other constructed items on land);
  • leases (including subleases but excluding financial leases and special leases);
  • investment assets (e.g.: shares, bonds, private securities);
  • goodwill (licenses, customers, brand name);
  • intellectual property; and
  • foreign currency (any currency which is not KHR).

Types of capital assets that are exempt

Capital assets which are exempted from the CGT are:

  • assets of state institutions, foreign embassy or consulate and international organisations;
  • primary residence of a taxpayer of at least 5 years before the sale/transfer;
  • immovable property among relatives as stated in the regulation on stamp duty tax; and
  • properties expropriated in accordance with the Law on Expropriation.

Under the Prakas  both resident taxpayers and non-resident taxpayers who make a capital gain on the transaction of capital assets above will be subject to the CGT. The CGT is a fixed rate of 20% of the gain made from the sale of a capital asset. This tax will be levied based on the difference between the sale price of the capital asset and initial cost of the asset when first acquired. Despite this being the general rule for calculating the difference in price, the GDT nevertheless reserves the right to determine the actual selling price of the asset where it deems that the indicated price is lower than the market value. This will particularly be the case for immovable property transactions where the GDT may determine the selling price in accordance with Prakas on the Calculation of Stamp Duty.

Calculation and deduction methods for the CGT

In terms of calculating the CGT, taxpayers are allowed to deduct certain amounts from the capital gain before filing the final sum. Two deduction methods are provided for under the Prakas:

  • Determination-based deduction whereby the taxpayer deducts 80% of the proceeds without needing to provide reasons for the deduction. This method may only be used for calculating the CGT for capital gains from immovable property transactions; and
  • Actual expense-based deduction where the taxpayer deducts the actual incurred expenses from the transaction of a capital asset from the capital gains made from the transaction. This may be used for all five categories of capital assets mentioned above.


As mentioned, both resident and non-resident taxpayers will be subject to the CGT. Under the Prakas, resident taxpayers are natural persons who: i) have a residence in Cambodia; ii) have been present in Cambodia for more than 182 days per year; and iii) whose principal place of abode is in Cambodia. Non-resident taxpayers are natural persons and legal entities who are not resident taxpayers. Whereas resident taxpayers are subject to capital gains from sale of properties located worldwide, non-resident taxpayers are not. If the resident taxpayer has paid CGT for capital transactions in another country outside of Cambodia, but the tax paid has a lower rate than that in Cambodia, the taxpayer shall pay the difference between the CGT in Cambodia and the country concerned. However, this is still subject to whether Cambodia has a double taxation agreement including the subject of CGT with the country abroad.

We are happy to assist you with any queries you may have regarding the capital gains tax in the transactions you face. If you need assistance in this, or require further information, please feel free to contact Matthew Rendall of SokSiphana&associates (a member of ZICO Law).

This alert is for general information only and is not a substitute for legal advice.


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