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Cambodia: Tax implications for share premium; board of directors subject to tax on salary

Guidance from the General Department of Taxation

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August 4, 2025

The General Department of Taxation in June 2025 issued the following guidance:

  • Tax obligation for share premium: Instruction No. 18574 GDT (June 17, 2025) addresses concerns regarding the tax implications of “share premium.” Effective immediately, the instruction defines “share premium” as the excess amount received over the par value of shares during capital increases. It clarifies that share premium is an additional capital contribution and not taxable income. Additionally, share capital and share premium for new shares must be fully paid into the enterprise and clearly recorded in the accounting records with proper supporting documents.
  • Tax obligation for board of directors: Instruction No. 19116 GDT (June 20, 2025) clarifies tax obligations for board of directors (BOD) members and company directors under the Tax on Salary (ToS) and Fringe Benefits Tax (FBT) Prakas No. 575. BOD members or directors engaged in employment activities in Cambodia are subject to ToS, regardless of salary payment location. If they do not meet the employment status, services provided are subject to withholding tax. However, BOD members or directors not actively managing or receiving salaries in Cambodia are not subject to ToS.

Read an August 2025 report prepared by the KPMG member firm in Cambodia

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