Payment of Dividend

Withholding Tax on Dividends from Non-Resident Investors

If non-resident investors ( outside of Cambodia) invested resident companies in Cambodia, and resident companies made profit and contribute dividends to non-resident investors, so resident companies will withhold tax on dividend before dividend payment.

If resident companies do not withhold tax from dividend payment, so resident companies in Cambodia will pay withholding tax on dividend on behalf of non-resident investors.

Withholding tax on dividend from non-resident investor is subject to tax rate at 14% (standard rate).

Example 1

Resident XYZ Company registered at Cambodia have two major shareholders. Shareholders are resident investors in Cambodia and other shareholders are non-resident investors outside of Cambodia.

Assume that XYZ Company declared and paid dividends to resident inventors (Cambodian) and non-resident Inventors (foreigners) for $80,000 and $5,000 respectively.

Required:

Calculate withholding tax (WHT ) on dividends if any

Answer 

Withholding tax (WHT ) base =$5,000

Withholding tax (WHT )=$5,000 x 14%=$700

Please note that dividends ($80,000) paid to resident investors (Cambodian) are not subject to withholding tax on dividends.