On March 12, 2025, Cambodia’s Ministry of Economy and Finance issued Prakas No. 192 on Tax Rules and Procedures for Trust to determine the tax rules and procedures for trust operations. With the exception of trusts whose legal form is a company or enterprise, all trustors, trustees, and beneficiaries engaged in trust operations in Cambodia are subject to this new regulation.

Taxpayer Registration

A trustee company must register as a medium or large taxpayer. An independent individual trustee must register as a small, medium, or large taxpayer depending on the amount of turnover or the value of the fixed assets of the business, as stipulated in the Prakas on the Clarification of Taxpayers under the Self-Assessment Regime. Independent individual trustees must register as taxpayers within 15 working days from the commencement of economic activity or from the receipt of a license or authorization from the Trust Regulator.

Accounting Records

Accounting records should follow the rules stipulated in Article 6 of the Law on Taxation., which requires small taxpayers to use simplified accounting, while medium and large taxpayers must adhere to the Cambodian International Financial Reporting Standards (CIFRS).The trustee must maintain separate accounting records between its own operations and the trust. If the trustee manages more than one trust, the trustee must prepare separate records for each trust. For all the records, the trustee must clearly identify the ownership of all assets, liabilities, expenses, and other transactions.

Taxation of Trustee’s Income

Trust property or funds that are transferred to a trustee for management are not considered income or property of the trustee. However, any allowances or commissions that the trustee receives from managing the trust are taxed as income.

The trustee must follow the general rules on expenses outlined under Cambodian tax law to record all income and expenses related to managing the trust. The income tax rate, as set out in Article 20 of the Law on Taxation, is 20% on the taxable income of legal persons and a progressive rate between 0% and 20% on the taxable income of physical persons and sole proprietorships, and the share portions distributed to members of partnerships.

Taxation of Trust Property and Transactions

Trust property could be subject to four types of tax regulation:

• Tax on rental of immovable property: The trustee must record any rental income earned from immovable trust property and pay a tax on rental of immovable property on this income.
• Capital gains tax: The trustee must record any income derived from the sale or transfer of capital and pay a capital gains tax on this income.
• Withholding tax: If the income has not already been subject to capital gains tax, the trustee must record any remittance of after-tax income to a non-resident taxpayer and pay a withholding tax (14%) on this transaction.
• Stamp tax: The trustee must record any transfer of ownership, right of possession, or share contribution involving immovable or movable property, trust property, or shares and pay a stamp tax on these transactions.

The trustee must comply with all other applicable tax laws and regulations. Existing regulations on tax exemptions are also applicable for trust property, if eligible.