Prakas on Rules and Procedures of Taxation on Trust

Introduction

On 12 March 2025, the Ministry of Economy and Finance (“MEF“) issued a new Prakas No. 192 on Rules and Procedures of Taxation on Trust (“Prakas“). This Prakas applies to trustors, trustees, and beneficiaries who are resident taxpayers or non-resident taxpayers that are involved in the operation of trusts established in Cambodia, with the exception of trust structures with the legal form of a company or an enterprise.

This Update sets out a high-level summary of the key requirements outlined under this Prakas.

Tax Registration

• • • Trust companies are required to be registered as medium or large taxpayers.
    • Independent individual trustees shall be registered as small, medium or large taxpayers based on their actual turnover or business assets in accordance with relevant tax regulations on classifications of taxpayers.
    • The tax registration shall be made within 15 working days from the date of actual operation or the receipt of licence and/or approval from the Trust Regulator.

Accounting Books and Records

• • • Trustees shall maintain separate accounting books between their own operations and the trust operations. This means that trustees are required to clearly determine and separate the assets, income, expense, liabilities, and other operations to be recorded in their own accounting books and the accounting books of the trust operations.
    • Trustees are required to use the accounting rules as stipulated in Article 6 of Cambodia’s Law on Taxation.
    • Trustees are required to prepare separate accounting books for each of the trust operations in the event that the trustee manages more than one trust operation.

Taxation

1. 1. Taxable Income

A trustee shall be subject to tax on income for remunerations or other fees received from the management of trust operations.  

Rates of tax on income are as follows:

• • • 20% for legal persons.
    • Progressive rates from 0% to 20% for natural persons, sole proprietorships, and partnerships.

Trust property or trust funds that are transferred into a trust are not considered as the trustee’s income and/or property. Therefore, tax on income on the trustee does not apply to such trust property or trust funds.

1. 2. Taxation on Trust Property

This Prakas places the obligation on the trustee to record, calculate, file tax returns and pay taxes to the tax administration in accordance with the relevant regulations in force, in relation to the trust property, as follows:

• • • Tax on Rental Income of Immovable Property

Income from the rental of immovable property being a trust property shall be subject to tax on rental income from immovable property.

• • • Capital Gains Tax

Income from the sale or transfer of trust property shall be subject to capital gains tax.

• • • Stamp Duty

Transfer of ownership, possessory rights or capital contribution in the form of immoveable property and movable property, trust property or transfer of shares shall be subject to stamp duty.

• • • Withholding Tax

Repatriation of the income that has already been subject to income tax to non-resident taxpayers shall be subject to withholding tax. However, if relevant capital gains tax on that income has been paid, such repatriation of income is no longer subject to withholding tax.

Besides the above taxation regulations, existing tax exemptions remain applicable to trust properties, where relevant.

If you have any queries on the above, please feel free to contact our team members listed here, or our Tax Manager Chum Socheat who will be happy to assist.