The General Department of Taxation is pleased to inform, enterprise mangers or owners who lease real estate that have allowed customers to set aside some time to construct, renovate or improve land, warehouses, buildings or offices for business purposes. For consistency in the implementation of the provisions on income tax and value-added tax, the General Department of Taxation would like to make the following recommendations:

Real estate lease contract, which stipulates a period of time for construction, repair or renovation, and during that period the property owner does not charge any fees or income tax, withholding tax on real estate fees and value-added tax shall be in accordance with that contract. The time allowed for construction, repair or renovation shall not exceed 10 (ten) percent of the total lease term in the contract.

In case of having a contract as stated in the first point above, the property owner must submit the lease contract to the tax administration within 30 days after the date of signing the contract. If the time for construction, repair or renovation is extended, the property owner must apply to the tax administration for review and approval.

The General Department of Taxation sincerely hopes that the enterprise managers or owners engaged in real estate rental activities in the Kingdom of Cambodia will effectively implement the contents of this guideline from the date of signing.