{
  "title": "Tax Incentives in Cambodia",
  "publication": "IMF Working Papers, March 29, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2018/03/29/tax-incentives-in-cambodia-45733",
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  "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.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Cambodia offers a number of tax incentives to investors comparable to regional peers.\n- The paper reviews these incentives to assess their costs and benefits, including their likely effectiveness in attracting capital and in supporting the diversification strategy.\n- 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.\n- Other features of the tax system, such as the high withholding rate on dividends, imply relatively high effective tax rates for foreign investors."
    },
    {
      "heading": "Analysis of the tax holiday",
      "content": "- The tax holiday in Cambodia functions as a deferral rather than an exemption.\n- Because it is a deferral, its effectiveness in attracting investment may be limited relative to tax holidays that provide full exemptions."
    },
    {
      "heading": "Other tax-system features affecting investors",
      "content": "- High withholding rate on dividends contributes to relatively high effective tax rates for foreign investors.\n- Effective tax rates for foreign investors are influenced by the interaction of tax holidays (as deferrals) and withholding tax provisions."
    },
    {
      "heading": "Policy recommendations discussed",
      "content": "- Weigh revenue and other costs of tax incentives against the need for a competitive tax system.\n- Consider shifting from tax holidays toward investment allowances.\n\n---\n\n Content in this bundle\n\n- Tax Incentives in Cambodia, WP/18/71, March 2018\n  - Tax Incentives in Cambodia, WP/18/71, March 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Tax Incentives in Cambodia, WP/18/71, March 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/03/29/tax-incentives-in-cambodia-45733"
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    "[Markdown version](/en/publications/wp/issues/2018/03/29/tax-incentives-in-cambodia-45733/index.md)",
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    "Authors: Manuk Ghazanchyan, Alexander D Klemm, Yong Sarah Zhou",
    "Published: March 29, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484347522.001",
    "Cambodia offers a number of tax incentives to investors comparable to regional peers.",
    "The paper reviews these incentives to assess their costs and benefits, including their likely effectiveness in attracting capital and in supporting the diversification strategy.",
    "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.",
    "Other features of the tax system, such as the high withholding rate on dividends, imply relatively high effective tax rates for foreign investors.",
    "The tax holiday in Cambodia functions as a deferral rather than an exemption.",
    "Because it is a deferral, its effectiveness in attracting investment may be limited relative to tax holidays that provide full exemptions.",
    "High withholding rate on dividends contributes to relatively high effective tax rates for foreign investors.",
    "Effective tax rates for foreign investors are influenced by the interaction of tax holidays (as deferrals) and withholding tax provisions.",
    "Weigh revenue and other costs of tax incentives against the need for a competitive tax system.",
    "Consider shifting from tax holidays toward investment allowances.",
    "**Tax Incentives in Cambodia, WP/18/71, March 2018**"
  ],
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