We would like to take this opportunity to remind our readers that the immovable property tax (“TOIP“) and Unused Land Tax deadline for 2020 is next Wednesday the 30th of September 2020. The 2020 TOIP and Unused Land Tax payment can be made at any tax branch or any branch of Canadia, Acleda, Vattanac or Cambodia Public Bank. Those already registered for TOIP and Unused Land Tax need to provide their 2019 tax payment receipt or Property Tax Registration Identification Card.
The TOIP rate is 0.1% which applies on an annual basis to all immovable property which has an assessed values exceeding Khmer Riel 100 Million (approximately USD 25,000). For further information regarding TOIP and how it is calculated please refer to our earlier update here.
Unused Land Tax
In their Notification issued on the 28th of August 2020 the General Department of Taxation (“GDT“) reminded those required to declare and pay TOIP by 30 September 2020. The Notification also referred to unused land tax being due and payable by 30 September 2020.
As with TOIP the 2020 Unused Land Tax payment can be made at any tax branch or any branch of Canadia, Acleda, Vattanac or Cambodia Public Bank. Those already registered for Unused Land Tax need to provide their 2019 tax payment receipt or Unused Land Tax Registration Identification Card.
To process the unused land tax payment at the tax branch, the following documents must be submitted:
- Tax Form on Unused Land (issued by the GDT) – which outlines the information about the unused land and the owner of the land;
- A copy of the 2019 unused land tax receipt
- A copy of the Certificate of Immovable Property ownership or Letter of Ownership issued by the Cadastral administration or authorities;
- A copy of the current Patent Tax certificate; and
- A copy of the ID card or passport of the director or chairman of the company.
Please note that the failure to pay Unused Land Tax on time may trigger penalties as per the tax regulations.
What is Unused Land Tax?
The Finance Act of 1995 established an unused land tax which is “imposed on a vacant block of land without any building or the land on which there is only abandoned building, in some cities or in some regions determined by the committee for evaluation of unused land.” Such unused land tax shall be paid on an annual basis by the proprietors at the rate of 2% calculated on the square-meter price of the land depending on the region with a market value determined by Land Appraisal and Valuation Committee.
There are certain exemptions with respect to who is required to pay unused land tax and these relate to the use of the land, percentage of revenue generated from the land and whether or not the land belongs to the State.
As noted above the Unused Land Tax is payable the latest on the 30th of September each year.
TOIP and Unused Land Tax
When TOIP was introduced, there was some confusion as to whether an owner of unused land would be responsible to pay both TOIP and TUL. The Financial Law 2015 clarified this point by stipulating that “Tax on Unused Land shall be paid by the owner on land that does not fall under the scope of tax on Immovable Property”.
We can help
DFDL can assist you with the registration of your immovable property and the declaration of any applicable TOIP and Unused Land Tax. We have dedicated skilled staff that can identify your liability for TOIP and Unused Land Tax, calculate the amount of tax payable, complete the required, Khmer, declaration and submission forms and liaise with the Government and local authorities to successfully register your immovable property and submit your tax declaration form and payment – if applicable.
Please contact your usual DFDL advisor or call through to our general line to obtain further information as to these and other services.
DFDLs Tax Practice Group and Real Estate Practice Group are happy to provide you with the following assistance:
- Advisory and optimization of Property Tax
- Registration with the authorities of your property
- Compliance obligations
- Advice on the tax structure of your property project
- Transfers of land and buildings
Tax services required to be undertaken by a licensed tax agent in Cambodia are provided by Mekong Tax Services Co., Ltd, a member of DFDL and licensed as a Cambodian tax agent under license number – TA201701018.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.