Tax incentives are granted to companies that have listed their shares or issued debt securities on the Cambodia Securities Exchange (CSX), whether they are small to medium-sized enterprises or large companies.
The nine stock listed companies on the CSX – with seven listed on the Main Board and two on the Growth Board – have received and are receiving tax incentives.
Six listed companies – Grand Twins International (Cambodia) Plc, Phnom Penh Autonomous Port (PPAP), Phnom Penh SEZ Plc (PPSP), Sihanoukville Autonomous Port (PAS), DBD Engineering Plc (DBD) and JS Land Plc. (JSL) – receive a 50 per cent reduction on income tax.
Phnom Penh Water Supply Authority (PWSA), Pestech (Cambodia) Plc (PEPC), and Acleda Bank Plc (ABC) also obtained incentives on income tax, at two per cent, 2.757 per cent and 2.5076 per cent, respectively.
The listed companies received a total of approximately 35 billion riel (around $8.75 million) from tax incentives for the first three years from the listing date, and they can use this portion of the incentives as working capital to expand their business operations.
With the firms paying back to the government approximately 150 billion riel (around $37.5 million), the amount that all the listed companies paid to the government was around four times the amount the government provided in tax incentives.
When a company is a publicly listed, it is transparent, accountable and enjoys a good reputation both locally and internationally.
The company can consequently grow its business with the recognition of large investors and the support of the public.
The Cambodian government has since 2011 issued three Anukrets on Tax Incentives in the Securities Sector, with a fourth issued this year.
Dated February 24 this year, Anukret No 42ANKr.BK on Tax Incentives in the Securities Sector brought two major benefits to listed companies.
It allowed for a 50 per cent reduction in annual income tax for the first three years based on issuance size, or for any period approved by the Ministry of Economy and Finance.
It also allowed for tax liability waivers of full income tax, withholding tax, value added tax (VAT), specific tax on certain merchandise and services, accommodation tax and public lighting tax.
Meanwhile, public investors will gain 50 per cent deduction of withholding tax and capital gains tax on interest and/or dividends which derive from holding and/or trading government securities, equity securities and debt securities.
They also get exemption on capital gains tax on buying and trading government securities, equity and/or debt securities for a period of three years.
Prepared by: Cambodia Securities Exchange (CSX), Listing and Disclosure Department.
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