Cambodia Investment Income Tax Guide 2026

Overview — Investment Income Taxation

Cambodia's tax system provides significant incentives for investment. Dividends distributed by Cambodian companies are not subject to withholding tax regardless of whether the recipient is resident or non-resident. Interest on bank deposits is also exempt from withholding tax. These policies make Cambodia a competitive jurisdiction for holding investments. However, the introduction of Capital Gains Tax (CGT) in 2024–2025 on real estate and shares sold within 5 years represents a notable change. Corporate investors are subject to CIT at 20% on investment income.

Dividend Taxation

Dividends paid by Cambodian companies to shareholders are subject to 0% withholding tax (no WHT). This applies equally to:

• Cambodian resident individuals: No WHT, dividend income generally not subject to further tax
• Cambodian resident companies: No WHT, dividends are exempt from CIT (participation exemption)
• Non-residents: No WHT on dividends (a very favourable treatment compared to regional peers)

Cambodia does not have a separate dividend tax — dividends received by individuals are not included in TOS income. For corporate shareholders, dividends received from Cambodian subsidiaries are exempt from CIT under the parent-subsidiary regime (where the parent holds at least 25% of shares). This makes Cambodia an attractive jurisdiction for holding companies.

Interest Taxation

Interest income in Cambodia receives favourable tax treatment:

• Bank interest: 0% withholding tax (no WHT on interest from bank deposits)
• Non-bank interest: 15% WHT applies to interest paid by non-bank entities
• Interest paid to non-residents: 15% WHT (subject to DTT relief)
• Corporate interest income: Included in taxable income and subject to CIT at 20%

The 0% WHT on bank deposit interest makes Cambodia particularly attractive for individual savers. Interest on Cambodian government bonds may also be exempt from tax. For corporate lenders, interest income is included in gross revenue and taxed at CIT rates.

Capital Gains on Investments

Capital gains from the sale of investments are subject to the following treatment:

• Shares sold within 5 years: CGT at 20% on the gain
• Real estate sold within 5 years: CGT at 20% on the gain
• Assets held more than 5 years: No CGT
• Corporate investors: Capital gains included in CIT computation

For individuals, the CGT is a final tax. For corporate investors, capital gains are included in taxable income subject to CIT at 20%, and the separate CGT may not apply if the CIT regime covers the gain.

Investment Funds and Collective Schemes

Cambodia has a developing investment fund industry. Investment fund income may be structured to benefit from pass-through treatment, where the fund itself is not taxed and investors are taxed on distributions. Specific regulations apply to real estate investment trusts (REITs), open-ended funds, and closed-ended funds. The Non-Bank Financial Services Authority (NBFSA) regulates fund structures. Tax treatment varies based on the legal form of the fund and the nature of distributions.

FAQs

Are dividends from Cambodian companies really tax-free?

Yes, Cambodia does not impose withholding tax on dividends. Dividends received by individuals are not subject to TOS, and dividends received by corporate shareholders are exempt from CIT under the participation exemption.

Is interest on USD bank deposits taxed?

No, interest on all bank deposits in Cambodia — whether in KHR, USD, or other currencies — is subject to 0% WHT and is not further taxable for individuals.

How is investment income from foreign investments taxed?

Cambodian tax residents are taxed on worldwide income. Foreign investment income (dividends, interest, capital gains) is theoretically taxable in Cambodia. However, in practice, foreign-source income of individuals is not actively enforced. Corporate investors must include foreign investment income in taxable income.

Does Cambodia have a participation exemption?

Yes, dividends received by a Cambodian company from a subsidiary in which it holds at least 25% of shares are exempt from CIT. Capital gains on the sale of such shareholdings may also be exempt under certain conditions.

Disclaimer

This guide provides general information about Cambodian investment income taxation for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Cambodian tax advisor or the General Department of Taxation for advice specific to your situation. InvestmentKit does not provide tax advice.