Sub-Decree 042 ANKr.BK on Tax Incentives in the Securities Sector was issued 24 February 2022 to advance the securities sector development in the Kingdom of Cambodia.

Scope

The scope of the Sub-Decree shall be applicable in the Kingdom of Cambodia to:

1. Equity and/or debt securities issuing companies granted approval from the Securities and Exchange Commission of Cambodia (thereafter is SECC) and listed on permitted Securities Market.
2. Public investors holding and/or buying-selling of government securities, equity and/or debt securities which are issued and listed on the permitted Securities Market. For the purpose of this Sub-Decree, the public investors are also included both resident and nonresident investors.

Tax Incentives on Profit Tax for Equity and/or Debt Securities Issuing Companies

Equity and/or Debt Securities issuing companies approved by the SECC and listed on the permitted Securities Market shall fulfill the form and submit to the General Department of Taxation through SECC in order to grant tax incentives by reducing 10% of total amount of tax on profit to be paid for three (03) years.

The three (03) years of tax incentives above shall be calculated from:

1. the beginning of the taxable year of securities issuance within the first six (6) months of the taxable year.
2. the beginning of the taxable year after the taxable year by which securities are issued within the last six (6) months of the taxable year.

Tax Incentives on Withholding Tax for Securities Investors

Public investors shall gain fifty (50%) percent deduction of withholding tax on interest and/or dividend which derives from holding and/or buying-selling the government securities, equity securities and debt securities for the period of three (03) years counting from the opening of securities market.

The person, withholding agents, disbursing interest and/or dividend shall calculate the withholding tax as prescribed in the paragraph 1 prior to disbursement and submission of withholding tax declaration letter to tax administration with compliance to a particular form no later than day fifteenth (15th) of the following month after withholding.

Tax Incentive Termination

The General Department of Taxation may propose the Ministry of Economy and Finance through SECC to terminate tax incentives as prescribed in the Article 4 of this Sub-Decree, in case the equity and/or debt securities issuing companies approved by SECC and listed on permitted Securities Market:

• fail to file monthly tax declaration and fail to pay tax in due date set by the tax administration.
• fail to file the annual tax declaration for the fiscal year and fail to pay tax in due date set by tax administration. The annual tax declaration shall be attached with audited-financial statements by professional accounting firms providing services in the securities sector, including balance sheet, income statement, statement of cash flow, and note(s) no later than three (03) months after the end of fiscal year.
• fail to allow the tax administration to conduct audit on accounting book and other documents.
• Fail to pay all taxes, value added tax (VAT) and interest that set for the taxable period.
• which is audited by the fiscal administration.

In case the companies receiving the tax incentives on profit as prescribed in this Sub-Decree fail to implement the Law on the Issuance and Trading of Non-Government Securities and other related regulations in the securities sector, SECC may propose the Ministry of Economy and Finance to terminate the tax incentives as prescribed in paragraph 1 of the Article 4 of this Sub-Decree.

Equity and/or Debt Securities issuing companies approved by SECC and listed on the permitted Securities Market shall not be granted the tax incentives on profit as prescribed in this Sub-Decree, if the companies delist themselves or being delisted on the permitted Securities Market.

Advance Grand Formula Co., Ltd is a Cambodian tax agent under license number – TA202204002.

Should you need any further information or support, please contact us at: tax@advancegroupkh.com.