Government Delays Capital Gains Tax Implementation to 2026.
Postponement to Strengthen Compliance and Preparedness
The General Department of Taxation (GDT) under Cambodia’s Ministry of Economy and Finance (MEF) has announced the postponement of the long-awaited 20 percent capital gains tax until January 1, 2026. The decision, endorsed by Prime Minister Hun Manet on October 14, provides taxpayers, investors, and businesses with additional time to strengthen their accounting systems, improve record-keeping, and ensure full compliance once the new regulation takes effect.
According to a GDT press release, this delay demonstrates the government’s commitment to supporting the business community while ensuring a smooth transition toward an improved tax framework. The extension aims to allow sufficient preparation and capacity building among both individuals and institutions affected by the policy.
What is 20% Capital Gains Tax?
The 20% capital gains tax means Cambodian investors will be required to pay tax only on the profit earned from selling certain assets, not on the total asset value. When it takes effect in 2026, it will apply to six asset categories, including real estate, leases, intellectual property, and investment properties. This move aims to promote fairness and transparency in Cambodia’s tax system, ensuring that gains from asset appreciation are taxed similarly to income from salaries. While the delay gives investors time to prepare, the tax ultimately supports long-term fiscal stability and a more balanced economic environment.
Purpose of the Capital Gains Tax
Under Prakas No. 496, the capital gains tax will apply to six specific categories of assets — including leases, investment properties, business reputation, intellectual property, foreign currency, and real estate. The 20 percent rate will be imposed on profits or gains rather than the total value of assets. Once implemented in 2026, the policy will be uniformly applied across all asset types.
The MEF emphasized that the introduction of this tax is designed to broaden Cambodia’s tax base, enhance fairness between wage earners and investors, and align fiscal policy with international standards. It is also a critical component of the country’s long-term fiscal reform agenda, aimed at generating sustainable national revenue and increasing transparency in asset-related transactions.
Business Community Responses
The announcement has been met with cautious optimism within the private sector. Mean Sovannarith, Co-Founder and CEO of DeGrand Realty, expressed that the GDT initially intended to implement the capital gains tax in 2024, which triggered wide-ranging discussions among investors and property owners.
He noted that the government’s latest decision reflects its careful consideration of market realities and its ongoing effort to maintain investor confidence during Cambodia’s economic recovery. “The recent delay reflects the government’s careful consideration of current market conditions and its commitment to maintaining investor confidence during the ongoing economic recovery,” Sovannarith said.
Clarifying Concerns in the Real Estate Sector
Addressing widespread concerns from the property market, Sovannarith clarified that there is no cause for alarm. He explained, “The tax rate is 20 percent on the profit or gain, not on the total value of the asset.” This means sellers will only be taxed after deducting all related expenses such as documentation, transaction fees, and operational costs.
He added, “There is nothing to worry about because the seller is only required to pay 20 percent after deducting all related expenses, including documentation, procedures, and operation costs.”
While private sector representatives have proposed extending the postponement for the real estate market specifically, GDT officials have stated that doing so could compromise transparency and fairness in tax collection across other asset sectors.
Moving Toward a Modernized Tax System
The delay in the capital gains tax represents another step in the MEF’s broader goal to modernize Cambodia’s taxation framework. By aligning national fiscal practices with international norms, the government seeks to create a balanced and equitable system that supports both public revenue growth and private sector stability.
As the 2026 implementation date approaches, the GDT encourages taxpayers and the public to stay informed, update their accounting systems, and prepare for full compliance with the upcoming policy.