IMF Working Papers

Tax Incentives in Cambodia

By Manuk Ghazanchyan, Alexander D Klemm, Yong Sarah Zhou

March 29, 2018

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Manuk Ghazanchyan, Alexander D Klemm, and Yong Sarah Zhou. Tax Incentives in Cambodia, (USA: International Monetary Fund, 2018) accessed November 22, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Cambodia, like its regional peers, offers a number of tax incentives to investors. This paper reviews these incentives to assess their costs and benefits, including their likely effectiveness in attracting capital and in supporting the diversification strategy. It finds that an important incentive, the tax holiday, differs materially from practice elsewhere in offering a deferral rather than exempting from tax and may not be very effective. Moreover, other features of the tax system, such as the high withholding rate on dividends, imply relatively high effective tax rates for foreign investors. The paper discusses potential reforms that weigh revenue and other costs of tax incentives against the need for a competitive tax system, including a shift from tax holidays toward investment allowances.

Subject: Corporate income tax, Effective tax rate, Tax holidays, Tax incentives, Tax policy, Taxes, Withholding tax

Keywords: Africa, Asia and Pacific, Central and Eastern Europe, Circumstances Cambodia, Corporate income tax, Depreciation rate, East Asia, Effective tax rate, Effective tax rates, Investment allowance, North Africa, R&D tax incentive, Retained earnings, Tax Competition, Tax holidays, Tax incentives, Tax incentives in Cambodia, Withholding tax, Withholding tax tax rate, WP

Publication Details

  • Pages:

    22

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/071

  • Stock No:

    WPIEA2018071

  • ISBN:

    9781484347522

  • ISSN:

    1018-5941

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