Legal Update: Notification on the Continuation of Tax Exemption, Additional Tax Relief, Extension and Suspension of Tax Implementation for the Real Estate Sector
Issue: No. 001P/24 – 10 January 2024
On 04 January 2024, the Ministry of Economy and Finance (the “MEF”) issued a Notification No. 001 on the Continuation of Tax Exemption, Additional Tax Relief, Extension and Suspension of Tax Implementation for the Real Estate Sector (the “Notification”).
Pursuant to the Notification, the MEF has decided as follows:
- Stamp Duty on the Transfer of Ownership or Right of Possession of Immovable Property
- Continuation of tax exemption on the transfer of ownership or right of possession of all kind of housing which characterized as Borey that is valued less or equal to USD70,000 until the end of 2024.
- Additional tax relief on the transfer of ownership or right of possession of all kind of housing which characterized as Borey that is valued more than USD70,000, allowing the deduction of USD70,000 from the tax base to calculate the stamp duty tax for the purchase of housing in the residential development project until the end of 2024.
To receive the above tax exemption and addition tax relief, the following criteria shall be met:
- Acquisition of ownership or right of possession of immovable property shall be happened from 25 February 2020 until the end of 2024 as well as the fulfillment of stamp duty tax declaration obligations;
- Acquisition of ownership or right of possession of immovable property from the registered developer; and
- Sale and purchase agreement shall be made based on the actual market price.
- Capital Gain Tax: extend the capital gain tax implementation until the end of 2024.
- Immovable Property Tax
- The exemption of tax reassessment for the registered immovable property and has been declared for a property tax with inaccurate of land or construction price, land or construction size, construction type and/or prescriptive period shall be ended by the end of 2023.
- The unregistered immovable property and has not been declared for a property tax is allowed to be registered and paid the tax from the last possession year or receipt of benefit.
- Extend the exemption of administrative sanctions (additional tax and interest) until the end of June 2024.
- Unused Land Tax: suspend the unused land tax implementation until the end of 2024.
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:
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NOEUM Sokvichhai,
Partner, Managing Director sokvichhai.noeum@sithisak-lawoffice.com +855 12 826 785
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Sokvichhai has more than 6 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, investment incentives & qualified investment project, and labour & employment related issues. Besides extensive compliance knowledge and experiences, he also assists major business in preparing and reviewing various commercial agreements, including but not limited to loan and security documents, join venture, partnership & shareholder agreements, franchise & distribution agreements, service & supply agreements, note subscription, pledge and guarantee agreements and other commercial contracts. Currently, Sokvichhai is also leading Sithisak’s Investigation Team to investigate any labour related misconduct within client’s company. |
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Dr. CHHAK Limchheang,
Partner, Head of Real Estate and Construction Practice Group limchheang.chhak@sithisak-lawoffice.com +855 89 813 160
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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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