VINAYA LAW FIRM

Taxation: Prakas on Determination of the Calculation Base for the Registration Tax on the Transfer of Ownership or Occupancy Right over Immovable Property

Date of publication: 29-07-2019


Category: Legal updates


Audience: All


Prakas on Determination of the Calculation Base for the Registration Tax on the Transfer of Ownership or Occupancy Right over Immovable Property

        On March 22, 2019, the Minister of Economy and Finance issued a Prakas (No. 343 សហវ.ប្រក) on the determination of the calculation base for the registration tax on the transfer of ownership or occupancy right over immovable property. The purpose of this Prakas is to guarantee the consistency of the tax collection on the transfer of ownership or occupancy right over immovable property, with the implementation scope covering properties such as buildings and/or land located in the capital and provincial administrative area in the Kingdom of Cambodia.

        According to the Prakas, the registration tax is levied at a rate of 4% of the value of the property which is subject of transfer of ownership or occupancy right. The calculation base of such tax is determined in order of priority as follows:

  1. 1.   Property value as determined in the Annex of the Prakas,
  2. 2.  Property value as determined in the contract of transfer of ownership or occupancy right or in relevant regulations in the event that such property has the value equal to or more than that in the Annex of the Prakas.

       As provided by the Annex of the Prakas, the value of the calculation base for the registration tax on the transfer of ownership or occupancy right buildings or condominiums sees a slight increase while the value of land sees a major increase. For example, compared to the Annex attached to Prakas No. 371 សហវ.ប្រក dated May 5, 2011, condominiums sees an increase between USD200 and USD400. As for land, the value of land around Central Market was only USD1,500/m2 in 2011, but as mentioned in this Prakas, land value in the said area is USD 4,000.

      Furthermore, this Prakas added that Prakas No. 962 សហវ.ប្រក dated August 28, 2014, issued by the Ministry of Economy and Finance on the determination of the calculation the base for the registration tax on the transfer of ownership or occupancy right over immovable property, as well as regulations which are contrary to this Prakas is void.

      Lastly, the Prakas mentioned that departments and institutions under the supervision of the Ministry of Economy and Finance are responsible for implementing this Prakas from July 1, 2019, onward.