When buying a property for investment, the most common way to generate income is to rent the property. With the money collected from rent also comes rental income tax. Rental income tax in Cambodia is an essential aspect of property ownership since it is applicable to both local residents and foreigners. This article offers a look into rental income tax, including property categories, tax rates, and the registration process.
Who Needs to Pay Rental Income Tax?
All property owners, regardless of nationality, are subject to property tax. Resident property owners are obligated to pay a yearly tax rate of 10%, while foreign property owners must pay at a slightly higher rate of 14%.
Types of Properties in the Rental Category: The rental income tax is levied on various property types, which include:
- Residential and commercial buildings or properties.
- Industrial and commercial installed equipment.
- Floating watercraft/homes or ships utilised for homestays or business purposes.
- Land devoid of structures employed for purposes such as stone, mine, coal extraction, lakes, and salt pan fields.
This tax is collected from property proprietors or leaseholders.
In this example, let's examine the rental income tax implications for two condominium units located on the same floor. Unit A is owned by a foreigner, while Unit B is owned by a local resident. Both units are rented out for $400.tax
|Property Owner||Nationality||Rental Amount||Tax Rate||Tax Amount|
|Unit A||Owned by a foreigner)||$400||14%||$56|
|Unit B||(Owned by a Khmer citizen)||$400||10%||$40|
In this scenario, the foreign property owner (Unit A) is subject to a 14% tax rate on their rental income of $400, resulting in a tax payment of $56. On the other hand, the Khmer citizen property owner (Unit B) is taxed at a rate of 10%, leading to a tax payment of $40.
How to Register for Rental Income Tax
To become a property tax taxpayer, property owners with properties worth $25,000 or more must register at their respective tax branches. The process involves completing two forms:
Tax Form PT01 - A form issued by the General Department of Taxation (GDT) to outline property specifics.
Tax Form PT02 - A GDT-issued tax application form.
When Property Tax Needs to Be Paid
Property tax payments are due annually and must be settled by September 30 each year. Property Taxes can be paid via local tax office branches or through ACLEDA Bank, Canadia Bank, Vattanac Bank, or Cambodia Public Bank. For already registered properties, taxpayers will only need the tax payment receipt of the previous year or their Property Tax Registration ID.
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