Service

Stamp Tax (Transfer of Ownership or Possession of Real Estate)

General Department of Taxation (GDT)

Tuesday, March 31, 2020
Source/Copyright: General Department of Taxation (GDT) Cambodia

Stamp Tax

Stamp Tax is a type of tax imposed on:

  • The transfer of ownership or possession rights of movable and immovable property, or the contribution of movable and immovable property as company shares.
  • The transfer of a partial or total share of a company’s stock or similar interests.
  • Supply contracts for goods or services that utilize the state budget.
  • Legal documents, including documents regarding company mergers and company liquidations/closures.

This tax is established for the benefit of sub-national administrative budgets for local development. It is collected from the person receiving the possession/ownership rights. The stamp tax that citizens encounter most frequently regarding the transfer of ownership or possession rights includes the following:

Stamp Tax (Transfer of Ownership or Possession Rights of Immovable Property)

A. What is Stamp Tax on Immovable Property?

It is a tax required to be paid during the purchase, sale, exchange, donation of immovable property, or when injecting immovable property as shares into a company.

B. Definitions of Key Terms

  • Immovable Property: Refers to land, houses, buildings, and other constructions, whether registered (with a title deed) or unregistered (without a title deed).
  • Immediate Family Circle: Refers to the transfer of ownership or possession rights between:
    • Biological parents and biological children
    • Husband and wife
    • Biological grandparents and biological grandchildren
    • Biological siblings
    • Parents-in-law and children-in-law
    • Grandparents-in-law and grandchildren-in-law
  • Concession (Gift/Donation): Refers to the transfer of immovable property from a living person to a relative without any charge.
  • Inheritance: Refers to the transfer of immovable property from a deceased person to a relative through:
    • A written will (in case there is no dispute), or
    • An authenticated legal document (in case there is no dispute), or
    • A court verdict or judgment (in case there is a dispute).

C. Tax Exemptions and Tax Reliefs

Stamp tax on the transfer of ownership or possession rights of immovable property is exempted for:

  1. Receiving ownership or possession rights of land as a concession from the Royal Government for economic or social benefits.
  2. Receiving ownership or possession rights of immovable property registered in the inventory of state institutions.
  3. Receiving ownership or possession rights of immovable property of foreign diplomatic missions, consulates, international organizations, or technical cooperation agencies of various governments.
  4. The transfer of ownership or possession rights of immovable property within the “Immediate Family Circle” via:
    • Inheritance: (Exempted for all relations listed in the family circle above).
    • First-Time Concession (Gift): Between biological parents and children, husband and wife, biological grandparents and grandchildren, or to their respective spouses to become joint property.

Tax Relief (Allowances):

  • For subsequent concessions (2nd time onwards) for the same immovable property within the family circle, a deduction of 100,000,000 KHR (equivalent to a tax reduction of 4,000,000 KHR) is allowed from the tax base.
  • Transfers between parents-in-law and children-in-law, or between biological siblings, are allowed a deduction from the tax base as follows:
    • Inheritance: Deduction of 200,000,000 KHR (equivalent to a tax credit of 8,000,000 KHR)
    • Concession (Gift): Deduction of 100,000,000 KHR (equivalent to a tax credit of 4,000,000 KHR)

D. Tax Rate, Tax Base, and Tax Calculation

  • Tax Rate: Set at a flat rate of 4% of the tax base.
  • Tax Base: The total value of the immovable property (land and/or buildings) determined by the following order of priority:
    1. The property value specified in the appendix of the Ministry of Economy and Finance.
    2. The property value specified in the transfer contract or other legal documents.

Formulas:

Tax Base (with Relief) = Total Property Value – Tax Allowance Amount

Tax Amount Due = Tax Base x 4%

Calculation Example:

A case of transferring ownership of a flat with a land size of 100 m² and a concrete-brick structure consisting of a ground floor (E0) and a first floor (E1), each measuring 64 m² (E0 = E1 = 64 m²). The building age is under 10 years, located on Wat Ang Taminh road (from Russian Federation Blvd (110) to Street 2004).

The appraised values for the stamp tax base according to the Ministry of Economy and Finance appendix are:

  • Land Value = $300 / m²
  • Ground Floor Value (E0) = $250 / m²
  • First Floor Value (E1) = $200 / m²

Step-by-Step Calculation:

  1. Calculate Property Components:
    • Land Value: 100 m² x $300 = $30,000
    • Ground Floor (E0): 64 m² x $250 = $16,000
    • First Floor (E1): 64 m² x $200 = $12,800
  2. Total Tax Base (USD):
    • $30,000 + $16,000 + $12,800 = $58,800
  3. Convert Tax Base to Khmer Riel (Exchange rate: $1 = 4,000 KHR):
    • $58,800 x 4,000 KHR = 235,200,000 KHR
  4. Calculate Tax Due (4%):
    • 235,200,000 KHR x 4% = 9,408,000 KHR

Total Tax to Pay = 9,408,000 KHR

E. Obligations and Tax Filing Procedures

Taxpayers are obligated to file and pay the stamp tax in full within 3 months after the issuance date of the “Forwarding Order” (Deika Banhchoun) of the document package:

  • For registered property (with title deeds), processed by the Capital/Provincial Cadastral Administration.
  • For unregistered property (without title deeds), processed by the local authorities (District/Khan level).

Taxpayers must submit the tax declaration to the General Department of Taxation for properties located in Phnom Penh, or to the respective Provincial Tax Branches for properties in the provinces. For provincial properties, requests can also be submitted directly to the GDT headquarters.