Legal and Tax Updates

Issue: No. 010P/25 – 26 June 2025

On 17 June 2025, the General Department of Taxation (the “GDT“) of the Ministry of the Economics and Finance (the “MEF”) issued an Instruction No. 18574GDT on the Share Premium Tax Obligation (the “Instruction“).

As previously, GDT identified concerns regarding uncertainties in the declaration of income tax on share premiums—specifically in cases where the amount received exceeds the par value during capital increases through share subscriptions. To promote clear, transparent, and efficient implementation of tax laws and regulations, the GDT hereby issues the following instructions

• The share premium represents the additional capital or the contribution of shareholders into the initial capital of the enterprise and is not subjected to tax on income; and
• Share capital and any newly issued share premium must be fully contributed to the enterprise and accurately recorded in the accounting records with proper supporting evidence. In the absence of such evidence, the capital increase will be subject to tax on income.

Disclaimer                                                         

The article is merely for general information purposes. It does not constitute a legal advice on the subject matter. If you have any questions or need any assistance, please feel free to contact us:

	NOEUM Sokvichhai, Partner, Managing Director sokvichhai.noeum@sithisak-lawoffice.com +855 12 826 785	Mr. Sokvichhai has more than 8 years of experiences in labour, corporate, commercial and investment advisory in Cambodia. He actively advices and assists various businesses in commercial, tax, and labour registration, business licensing, products registration & distribution, business recapitalization & restructuring, and mergers & acquisitions transaction. He also has particular experiences in advising collective investment fund and trust business, initial public offering, bond issuance, investment incentives & qualified investment project, and labour & employment related issues. Sokvichhai also assists major business in preparing various complex commercial agreements.
	Dr. CHHAK Limchheang, Partner, Head of Real Estate and Construction Practice Group limchheang.chhak@sithisak-lawoffice.com +855 89 813 160	He has several years of professional experiences in real estate-related transaction and construction sector in Cambodia. He has advised local and foreign clients on acquisition and disposal of residential, industrial and commercial properties, on commercial lease, factory perpetual lease, real estate joint venture development and FIDIC agreements. Recently, he led counsel to advise on both real estate and tax issues of real estate development project with an approximate investment portfolio of USD 40 million in Kampot Province. He is currently leading a legal counsel to advise a major domestic company in their joint venture property development with an investment portfolio nearly USD 200 million in Phnom Penh.

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