After being postponed three times, the Capital Gains Tax (CGT) will be implemented starting Jan 1, 2024, said Kong Vibol, director-general of the General Department of Taxation (GDT) on September 15.
During a live broadcast on tax awareness, Vibol said, “If nothing changes, we will start implementing the CGT on Jan 1, 2024, unless there is a decision from the government.”
He explained that CGT is levied on capital gains achieved at the time of sale or transfer of a property, but in the absence of profit, there is no obligation to pay the tax.
“Capital gains tax is not new. It has been in place for a long time, but the government has continued to delay the implementation. We needed to study this capital tax act from every angle and prepare to apply it,” Vibol said.
He stressed that the real estate sector is not affected by capital gains as the sale of real estate at a loss is not subjected to the tax. “The tax is only focussed on profit.”
“From the beginning, we [have mentioned that] we do not collect 40 to 50 percent tax like in France and Australia. We only take 20 percent of the amount deducting 80 percent of what the state allows. So, we think it is equivalent to around four percent,” he said.
In the first eight months of 2023, the GDT collected tax revenue of around $2.5 billion, which is equivalent to 71 percent of the financial plan 2023.
However, the total revenue is below 20 percent in comparison to the total in corresponding period last year, which is a result of businesses being impacted by the global and Cambodian economy.
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