2020 20 March

Cambodia Tax Update: Implementation of Tax Incentives for Listing Entities


In January 2019 we issued a client update relating to the new tax incentives to be provided for listing entities on the Cambodian stock exchange under Sub-Decree 01 ANKr.BK dated 4 January 2019 (“Sub-Decree 01”) – please click here to access the update and find out more about the tax incentives that have been provided to entities offering stock or debt securities on the Cambodian stock exchange (“CSX”).

Prakas no. 183 dated 25 February 2020 (“Prakas 183”) issued by the Ministry of Economy and Finance implements the Tax on Income incentive (“TOI incentive”) that was introduced in Sub-Decree 01 in January last year.

To recap:

Sub-Decree 01 is applicable to entities that list and offer either stock or debt securities on the CSX from 4 January 2019 and to public investors, both non-resident and resident, who hold or trade stock, debt or government securities from those entities that have listed on the CSX.

There is a three year limitation on applying for the incentives offered under Sub-Decree 01. Entities that are granted approval from the Securities and Exchange Commission of Cambodia (SECC) and registered with the CSX to make initial public offering of equity and/or debt securities within three years from the issuance of the Sub-Decree (being before 4 January 2022) need to submit an application to the General Department of Taxation through the SECC.

One of the tax incentives provided under Sub-Decree 01 relates to a 50% reduction of the annual Tax on Income liability for three years for a qualifying entity. The TOI incentive would commence at the beginning of the first tax year that the approval was given if the securities were issued before 30 June of that year. If the securities were issued after 30 June and before 31 December the TOI incentive would take effect from the following year.

Prakas 183 has provided the following clarifications with respect to the implementation of the TOI incentive referred to above:

  1. The TOI incentive applies to taxpayers that fall under the self-assessment tax regime in Cambodia that issue stock and/or debt securities for the first time on the CSX;
  2. Enterprises that issue their first public equity security which:
  • Is equal to more than 20% of the enterprises voting rights; and/or
  • Issue debt securities of more than 20% of the value of total assets which have a maturity of at least 7 years.

will receive the TOI incentive for the first three years as approved by the SECC in accordance with Sub-Decree 01.

     3.   Enterprises that issue their first public equity security that:

  • Is equal to or less than 20% of the voting rights of the enterprise; and/or
  • Issues debt securities equal to or less than 20% of the total asset value of the enterprise​.

will be granted the TOI incentive for 3 years following a declining proportion basis by taking 20.001% as a base, as stated in the table below, which includes:

  • For issued equity securities: the TOI incentive on the proportion which is not more than 20 Billion Riel (approx. USD5M).
  • Issued debt securities: the TOI incentive on the proportion which is not more than 8 Billion Riel (approx USD2M).

Table on Proportion TOI Incentive


Percentage % of the TOI incentive= (the number of issued stock/debt securities compared with the voting’s rights or total assets/20.001%) *50%.

*For the issuance of stock securities / the number of issued stock securities compared with the number of stock securities that have voting rights.

*For Debt securities/the number of issued debt securities compared with the total assets of the enterprise.

The DFDL tax team as always stand ready to answer any questions that you may have on this and other tax issues of concern.

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.


Clint O’Connell

Partner & Head of the Cambodia Tax Practice


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