Capital Gains Taxation in Cambodia
Definition of Capital Gains
In Cambodia, capital gains are defined as profits or gains derived from the disposal of capital assets. Capital assets include:
- Real estate properties
- Stocks and securities
- Bonds and debentures
- Business assets
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The formula for calculating capital gains is:
Capital Gain = Selling Price - Acquisition Cost - Expenses
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Tax Rates
Capital gains in Cambodia are taxed at a flat rate of 20%. This rate applies to both individuals and corporations.
Legal Framework
The taxation of capital gains in Cambodia is governed by the following laws:
- Law on Taxation (2019)
- Sub-Decree on Tax on Income from Transfer of Immovable Property (2019)
Legal Reasoning and Policy Objectives
The Cambodian government's policy objectives for taxing capital gains include:
- Generating revenue for the government
- Ensuring that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals
- Promoting investment and economic growth
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