Dividend income received from resident taxpayers

Lesson Summary-Dividend income received from resident taxpayers for Cambodia Tax

If  A Company received dividend from B Company, and B Company’s profit is subject to tax on income /profit (TOI) at 20% or 30%, so dividends received from B Company’s Profit is not subject to tax on income (profit) again for A Company.

Example 1

Assume that ABC company invested 40% shares of XYZ company. Both companies are subject to tax on income (profit) 20%.

Assume that XYZ declared and paid dividend of $1,000 to ABC company.

Required

Suggest tax on income treatment for dividend to ABC Company.

Answer

Because XYZ’s profit is subject to tax on income (profit) 20%, so dividend income of $1,000 is not subject tax on income (profit) again for ABC Company.