Insight into Property Rental Tax in Cambodia
Do you know how much you have to pay for property rental tax per month and how property rental tax is calculated?
I. Definition of Property Rental Tax
What is tax on property rental? Tax on property rental and land is the kind of tax levied on fees generated from renting building, which is constructed on land such as commercial or industrial building and floated housing. Property rental tax is collected from landlords or tenants and will be used for the sake of sub-national government.
II. Declaration of Property Rental Tax
The tax on property rental is declared monthly effective from the date on which the rental agreement was signed between landlord and tenant. Landlord must declare tax on property rental in 15 days starting from the rental agreement or change in rental agreement date to local tax department where the property is located along with a copy of rental agreement.
In the case that the rental agreement was terminated in approximately 15 days, landlords must declare in writing to previous tax department. If the landlords deny paying tax, tenants (company) shall withdraw property rental fee from landlord to pay for this tax. All tax declaration certificates shall include proper date and signature.
III. Property Rental Tax Rate and Exemption
The tax rate on property rental and land amounts to 10 percent of gross property rental fee. Gross property rental fee refers to the amount of money agreed in the rental agreement between landlord and tenant. Hence, property rental tax to be paid = Gross Property Rental Fee x 10%. However, this tax excludes deposit, property rental fee under 500,000 Khmer Riels and automatically-declared tax payers.
For example, Mr. A leases a house to Mr. B for $500 dollars per month. Mr. B deposits $1,500 dollars for repairing the house (if any damage) after the contract expires. Both Mr. A and Mr. B are individual persons. Therefore, property rental tax = $500 x 10% = $50. Mr. A will pay $50 to local tax department. However, if Mr. B is the company that rents a house from Mr. A, Mr. B will be responsible for paying the tax by withholding rental fee from Mr. A.
In other cases, if the property of tax payer is under damaged or tax payer is in critical condition threatening his life, payment of this tax might be postposed or the amount of money to be paid is reduced or cancelled.
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